Volkswagen to Take Over Porsche, Finally.

It seems the VW Group family of car brands is adding one more.  Earlier today, Volkswagen AG announced it would be buying the 50.1 percent of Porsche AG that it doesn’t already own, fulling adding Porsche to the stable that includes VW, Audi, Bentley, Bugatti, Lamborghini, Seat, Scania, Skoda and Man.  Purchase price: 34,847 Porsche 911 Turbo S’s or $5.6 billion (€4.46 billion) for those people who don’t use cars as a measure of currency. 

Originally, the plan, decided in 2009 after Porsche sunk €10 billion into debt trying unsuccessfully to acquire Volskwagen, was for the brands to combine at the end of 2011.  In September last year, that plan was scrapped due to lawsuits against Porsche in the U.S. Europe.  This current plan is likely to be completed by August 1st of this year and will result in a fairly convoluted VW/Porsche relationship.  Volkswagen AG will wholly own Porsche AG through a holding company, while Porsche SE, the former owners of Porsche AG will own 50.7 percent of Volskwagen AG.  Gotta love huge industrial corporate mergers.

Is this a good thing for the car world? Volkswagen AG Chairman Prof. Dr. Martin Winterkorn thinks so, saying: 

“The unique Porsche brand will now become an integral part of the Volkswagen Group. 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”

Could this mean a Porsche with a Lamborghini V12 mounted way too far out over the rear wheels?  Or, a small Bugatti with flat-six?  Or, who knows, maybe Porsche will even incorporate some design cues from the Audi R8 into the next 911.  Oh, the possibilities.

In case you really like corporate structure diagrams, below are the before and after shots of the company structure, courtesy of VW.

BEFORE:

Before
AFTER:
After

Press Release from Volkswagen AG:

Volkswagen and Porsche create integrated automotive group

  • Accelerated integration model permits combination of automotive business with expected effect as from August 1, 2012
  • Porsche’s automotive business will be contributed in full to the Volkswagen Group ahead of schedule for around €4.46 billion plus one Volkswagen ordinary share
  • Net synergies of approximately €320 million from the accelerated integration will be split 50:50 between the two companies
  • CEO Prof. Dr. Martin Winterkorn: “Good for Volkswagen, good for Porsche and good for Germany as an industrial location”
Wolfsburg, July 04, 2012 – Volkswagen Aktiengesellschaft and Porsche Automobil Holding SE (Porsche SE) are to create the integrated automotive group through the contribution in full of Porsche’s automotive business to the Volkswagen Group, with the move expected to already take effect as of August 1, 2012. The relevant governing bodies of the two companies approved the plan for this today. The move will allow the integrated automotive group consisting of Volkswagen and Porsche to become reality some two years earlier than would have been economically feasible under the put/call options provided for in the Comprehensive Agreement signed in August 2009. Porsche SE will receive around €4.46 billion and one Volkswagen ordinary share as consideration for contributing the 50.1 percent of Porsche AG not yet owned by Volkswagen. “The unique Porsche brand will now become an integral part of the Volkswagen Group. 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”, said Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft.

Author: Nick Glasnovich

Founder & Executive Editor of TickTickVroom.com.

Share This Post On

Submit a Comment

Your email address will not be published. Required fields are marked *