Ending years of bickering between two of Germany’s most successful automakers and the respective families that hold their fate, Volkswagen has announced that it will complete the buyout of the remaining 50.1 percent stake of Porsche’s sports car business it doesn’t own already for €4.46 billion (US$5.6 billion).
In a joint statement, Volkswagen and Porsche said that the deal will be completed by August 1, 2012.
Following Porsche’s failed attempt to gain control of VW in 2008, the sports car maker decided to merge with Volkswagen. However, the plan was dropped in the same year after numerous lawsuits brought by investors seeking billions of euros in damages from Porsche due to the latter’s failed attempt to take over VW.
In 2009, the two companies agreed for Volkswagen to buyout Porsche’s sports car business. Volkswagen bought a 49.9 percent stake of Porsche for €3.9 billion at the end of 2009 and agreed to complete the takeover in August of 2014.
This year, the two automakers decided to speed up the process in order to avoid a tax bill of up to €1.5 billion (US$1.9 billion) that would have been applied to the sale if it had taken place in 2014.
And if you’re not confused already, maybe this will help: Volkswagen will pay the money to Porsche SE, a holding company that not only owns the Porsche sports car business but also has a 32.2 percent stake in Volkswagen AG…
“The accelerated implementation of the shared goal will make Porsche SE a financially strong holding company with attractive potential for increasing value added. We are creating clearly defined, sustainable structures and a solid outlook for Porsche SE’s future,” said Porsche board member Matthias Mueller
“In their operating business, Porsche and Volkswagen will now be able to leverage synergies at an earlier stage and cooperate more easily. Porsche SE, as the largest Volkswagen shareholder, will also benefit greatly from this,” he added.
Volkswagen’s Chief Executive Officer Martin Winterkorn agreed with Mueller that the buyout of Porsche will help both companies in the future.
“The unique Porsche brand will now become an integral part of the Volkswagen Group,” said Winterkorn.
He continued: “That is good for Volkswagen, good for Porsche and good for Germany as an industrial location. Combining their operating business will make Volkswagen and Porsche even stronger – both financially and strategically – going forward. We can now cooperate even more closely and jointly leverage new growth opportunities in the high-margin premium segment through targeted investments in pioneering products and technologies. This will benefit our customers, our employees and our shareholders.”
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