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VW to buy 42% of Porsche, Merger Agreement Finalized

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Porsche Volkswagen Merger

Porsche Volkswagen Merger

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In late July Porsche announced Wendelin Wiedeking would be leaving his position as the company's CEO to be replaced by Michael Macht, clearing the way for the supervisory board at Volkswagen to lay the foundation for an integrated company with Porsche under VW leadership. Yesterday reports broke that the Auto Union name could be revived to brand it and that Porsche's American arm would operate autonomously, and today VW has announced it will finalize the merger with Porsche by purchasing 42% of Porsche's shares by then end of 2009.

The purchase will tie the two companies very closely together, though in a somewhat reversed role from Porsche's initial conception of the arrangement. Porsche had hoped to take over the VW Group by buying up its voting shares, but due to German state laws and its own debt, it was ultimately forced to turn to VW itself for help, leading to the VW Group's purchase of Porsche stock. Qatar, which has recently sought a share of Porsche and VW both, has also been welcomed into the deal as well as a key shareholder.

According to a statement released by the VW Group on the announcement of the acquisition, "The integrated automotive group will be formed from the progressive participation of Volkswagen in Porsche AG and the subsequent merger of Porsche Automobil Holding SE and Volkswagen AG. Porsche will remain an independent company headquartered in Stuttgart."

While VW re-affirms Porsche's independence, the Auto Union name is also being considered to help preserve the idea that it's not Volkswagen running the whole show.

The Auto Union name was originally given to a merger of four German carmakers - Horch, Audi, DKW and Wanderer - in 1932. The brand went on to fame in motorsports through the 1930s, but was disrupted by World War II, and subsequently went through a number of reformations, eventually ending in a renaming to Audi AG in 1985.

VW board chairman Martin Winterkorn described the company's plans in July, saying, "Volkswagen and Porsche have excellent know-how at their disposal and can use their resources even more efficiently by combining them. For this reason, we expect additional growth opportunities, safeguarding existing jobs and creating new ones.

"At the same time, we can call on our considerable experience in the integration of proud and successful brands rich in tradition. Like Audi today, Porsche can also continue its independent development under the aegis of Volkswagen and preserve its own identity. We have great respect for the achievements of the Porsche workforce and are convinced that Porsche can enrich the Volkswagen Group – just as Volkswagen can vice versa enrich Porsche.”

With today's announcement of VW's plans to buy into Porsche, the merger of the two companies is all but complete, but in other respects, it is only just beginning. Now the work to fit Porsche and its products together with the other 9 brands under the VW Group - or Auto Union - umbrella without conflicting with others, like Audi and Lamborghini, begins. How that is to be handled is an issue of great concern for Porsche enthusiasts, as it could dramatically re-shape the Porsche lineup.
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Comments (16)
  1. Pinch me!
     
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  2. YAY, volkswagen's saved
     
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  3. wow, how things have changed in the last 15 months.
     
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  4. i think this is bad news for porsche enthusiats, looks like the brand will be more diluted than it ever was.

    Please dont put porsche's 6 cylinder boxer engine in an audi or vw!!
     
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  5. As the British Economist newspaper put it, "a sad end to 78 years of proud independence" for Porsche.
     
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  6. As the British Economist newspaper put it, "a sad end to 78 years of proud independence" for Porsche.

    My preference would certainly be a connection to VW in this situation rather than some of the very undesirable alternatives (Asia).

    VW was already Porsche's technical and manufacturing partner. This new development just makes things more stable for the future.

    And now maybe Porsche can get rid of their tacky mini-van like exterior door handles for something a lot more acceptable, like from the Golf.
     
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  7. Good news, now maybe porsche could go back to making sports cars again and not SUV's ands abominable sedans.
     
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  8. As the British Economist newspaper put it, "a sad end to 78 years of proud independence" for Porsche.

    My preference would certainly be a connection to VW in this situation rather than some of the very undesirable alternatives (Asia).

    VW was already Porsche's technical and manufacturing partner. This new development just makes things more stable for the future.

    And now maybe Porsche can get rid of their tacky mini-van like exterior door handles for something a lot more acceptable, like from the Golf.

    Yeah the door handles on the Golf are really classy
     
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  9. What a bad name for a car corporation: Auto Union... Otherwise, sounds good. I think that this'll let Porsche go a bit wild (bearing in mind that they won't need to worry about emission reduction schemes) and produce some amazing new cars... Hopefully...
     
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  10. I would dearly like to see Volkswagen in the near future kill-off the Cayenne, Cayman and Panamera sedan and replace this sad ( though successful - maybe in profits only ) SUV/cars with something that is more inspirational and totally different in looks with the 911 gene-pool... give them their own individual identities and still be recognizable as Porsche cars.
     
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  11. So the CEO went from WW to MM. :D From the merger I'd say Porsche is saved but not the other way around. By Having a parent company making small cars, the sports car company can concentrate what it does best. Same for Fiat owning Ferrari and various other companies, autonomous run companies with financial backbone in everyday car is the key to niche market success.
     
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  12. It's Porsche's own fault - the company tried a hostile takeover of VW and ended up in such a financial mess now it's VW in the driver's seat.
     
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  13. By gazzed
    #11, Posted: 8/13/2009
    I would dearly like to see Volkswagen in the near future kill-off the Cayenne, Cayman and Panamera sedan and replace this sad ( though successful - maybe in profits only ) SUV/cars with something that is more inspirational and totally different in looks with the 911 gene-pool... give them their own individual identities and still be recognizable as Porsche cars.
    I dont get your plan at all. I can understand getting rid of panamera and cayenne.. but cayman??
    have u even driven a porsche or more specifically the cayman before? I can assure you it handles way better than the 911(just a bit underpowered). why not get rid of the boxster too? its just a convertible cayman.
    If its one thing porsche should do is end the production of 911s for a while and reintroduce it 20-30 years from now, because its becoming the 3 series of sports cars. Then focus on building new cars(preferably mid engines) without having to design it like a 911.
    I know you might think its crazy to end the production of porsche's most venerable sports car, but its no crazier than limiting porsche to just building 911s and halting production of their gold mine the cayenne.This sort of thinking is the main cause reason why porsche are stuck with making 911 look alikes across their range (worst example = panamera)
     
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  14. You don't get the point ( mii ).. leave the cult fave 911 and Boxter, rebuild said ugly cars into something that gives them their own identities and maybe in the future expand further with more different looking Porsche cars.
    Oh sure the Cayman is screamer, so is the Cayenne for an SUV. Re-build.
     
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  15. Who knows where to download XRumer 5.0 Palladium?
    Help, please. All recommend this program to effectively advertise on the Internet, this is the best program!
     
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  16. That implies a rather small valuation for Porsche - I had the impression the firm was worth atleast 10 billion..I guess the interest payments on that debt are really suffocating the bottom line and cash flow.
     
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