The Car in Front is a Beetle

By DeusExMacintosh

Volkswagen takes over Porsche

Volkswagen says it has agreed a deal to buy the remaining 50.1% stake in Porsche it doesn’t already own by the start of next month.

VW will pay 4.46bn euros ($5.6bn; £3.6bn) plus one VW common share to acquire the stake.

The two firms had agreed in 2009 to merge by the end of 2011, but have since faced legal obstacles.

The deal is likely to reduce costs and boost VW’s earnings as it seeks to become the world’s biggest carmaker.

“The accelerated integration will allow us to start implementing a joint strategy for Porsche’s automotive business more quickly and to realize key joint projects more rapidly,” said Hans Dieter Poetsch, chief financial officer of Volkswagen.

Both the firms had been seeking to accelerate the merger. However, one of the stumbling blocks for the deal was the likelihood of a big tax bill for both the firms.

Volkswagen had acquired a 49.9% stake in Porsche in 2009.

According to various reports, if it bought the remaining stake before 2014, the two companies may have had to pay more than 1bn euros in taxes, making the move less attractive.

Analysts said that by structuring the deal as one which involved the payment of one VW common share to Porsche, the firms may be able to avoid that bill. They said that such a move means that the deal may see it being classified as a restructuring of the company rather than a takeover.

BBC News

4 Comments

  1. kvd
    Posted July 6, 2012 at 2:07 pm | Permalink

    So, DEM, will all new Porsches will come with the cute little plastic daisy-thing in the dashboard? Or will the new vdub sound like a throaty lion on steroids? Many wonders to come 😉

    But on a more serious note, it’s a weird thing that something which is touted to provide real economic ‘synergies’ is once again hostage to tax considerations. Me, I’d rather let ’em go, let ’em rip, believing that they’d do more for the good of the economy in the long term than an immediate pickup of E1Bn in tax.

  2. Posted July 6, 2012 at 6:33 pm | Permalink

    In one of the interesting quirks of history, the original Nazi era ‘Beetle’ was designed by Porsche pere…

  3. Posted July 6, 2012 at 11:05 pm | Permalink

    And will the bonnet of the latest racing Porsche pop open mid-race in classic-Herbie stylee?

  4. Paul
    Posted July 7, 2012 at 6:26 am | Permalink

    This is kind of like a homecoming for Porsche.

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