MotorAuthority

Official: Porsche now owns more than 50% of VW

Posted Mon Jan 5 2009 1:26 PM by Viknesh Vijayenthiran

By moving to more than 50% control of the VW Group, Porsche Automobil is now required to make a takeover offer for Sweden's Scania as well

Yet another chapter of the Porsche-VW takeover saga has unfolded today as Porsche has finally pushed its holding in VW over 50%. Porsche has held an interest of 74.1% in combined stock and options in VW since late last year, but was waiting on more favorable economic conditions to further increase its stake. With the new acquisition of shares, Porsche's direct ownership in VW now totals 50.76%.

Porsche acquired its majority by purchasing another $8.49 billion worth of VW stock. Even though the expenditure is large, it's about 25% of what it would have been late last year when a confluence of market conditions drove VW's share prices above $1,250 and temporarily made the company the most valuable in the world.

The majority grab means the company is now statutorily required to make a takeover offer to Swedish truck maker Scania, reports Reuters. It will almost certainly be a perfunctory offer that is not pursued, but it must nevertheless be made. VW owns about 69% of Scania's voting shares.

In late August of last year, Porsche announced that it had 74.1% control of the Volkswagen Group via a 42.6% direct equity stake and options giving that gave it the additional 31.5%. Referring to the increased share acquisition, Porsche CEO Wendelin Wiedeking said last year that "in light of the current economic environment, it therefore becomes increasingly unrealistic to achieve this goal within 2008." During the same conference, Wiedeking also reaffirmed his intention to eventually take Porsche's stake in VW to 75% in 2009.

Volkswagen is the world’s third biggest carmaker behind Toyota and General Motors and produces more than five million vehicles annually, but it is now presided over by a family-controlled company that makes a little over 100,000 expensive sports cars each year.

This difference in size between the two carmakers has lead to internal squabbles over who will control day-to-day operations. VW recently called on Porsche to stay out of its daily operations, with its chairman Ferdinand Piëch breaking ranks with his Porsche-family cousins to side with VW’s management board. Recent developments have seen a stabilization of sorts, however, with agreements on union and board representation soothing relations.

story Tags:

• 50%
• 50.76%
• Majority
• ndustry
• Porsche
• Volkswagen
• VW
• VW acquisition
• VW Group
• Wendelin Wiedeking

Reader Comments

• Tue Sep 16 2008 3:31 PM

  NoNameDenton says

  If Audi does not agree, I bet Porsche goes for a hostile takeover.

• Tue Sep 16 2008 8:04 PM

  Hammy says

  Damn this is starting to make me hate Porsche. All they'll do with Audi is hinder its potential by eliminating any of its models that compete directly with Porsche's own. Now that Porsche has chosen to expand its lineup theres no telling what will happen to any of Audi's future designs.

• Tue Sep 16 2008 8:56 PM

  NoNameDenton says

  Porsche is a company, their job to make money, and they will buy anyone that they see as a rival to protect themselves, I understand that. Do not like it, but good business sense.

• Mon Jan 5 2009 1:33 PM

  mburleigh8 says

  That sucks, I think VW was doing a great job, Now with Porshe basicly taking over It will likely screw up allot and people will think twice now before buying a european car.

• Yesterday, 5:36 AM

  Roy says

  The good news is that Porsche was waiting for economic conditions to improve before finalizing this deal. Since they just pushed the deal through, I guess this means the recession is over!

• Yesterday, 1:52 PM

  NoNameDenton says

  No Roy, means they got a good deal.