Volkswagen to Buy 42% of Porsche for €3.3 Billion

[Plex]

The tail keeps wagging the dog over in Germany, as low-volume Porsche is again looking to bump its stake in high-volume Volkswagen. This time, Porsche's supervisory board authorized increasing its stake to 31%, an action which would require the luxury sports maker to make a bid for VW itself. Porsche expects the mandatory bid (any stake increase over 30% requires a full bid) for VW will cost $134 a share.

The proposed combo would be formed as a holding company and converted to a European stock corporation with 12 supervisory board members headquartered in Stuttgart. Increased competition from Japanese, Malaysian, and Chinese automakers was cited by Porsche as a main reason to increase its share of VW. We're sure Porsche doesn't mind the windfall profits they've had since 2005, when they began investing in Volkswagen, either. This is huge news in Europe, where VW has long been at the top of the food chain, and we're getting the feeling that we'll be reading more industry stories like this in general as time progresses.

Autoblog

[Plex]

Porsche, the German maker of luxury sports cars, officially launched a mandatory takeover offer for Volkswagen, Europe's biggest car maker, on Wednesday.

But the price appeared low, suggesting that Porsche did not really want the bid to succeed.

Stuttgart-based Porsche, which has raised its stake in VW to 30.94 percent, said in a short statement that it would offer to buy all the remaining shares in the car maker at �100.92 ($134) apiece, as required by law.

The offer price was the legal minimum that Porsche was obliged to bid.

But with VW shares currently being traded at about �113 on the Frankfurt stock exchange, there appears to be little chance that shareholders will actually take up Porsche's offer.

That is, in fact, Porsche's very intention.

Under German law, a shareholder is obliged to launch a public takeover for all shares in a company once its stake rises above 30 percent.

Porsche raised its stake to 30.94 percent this week in a bid to thwart any potential hostile takeover bids. But the luxury sports car maker insisted that it has no plans to buy VW's entire share capital for the time being.

Analysts see the move as a clever way for Porsche to increase its say in VW without being forced to pay over the odds for any additional shares.

Furthermore, Porsche could be speculating that VW's share price would fall in the wake of the announcement, thereby enabling them to buy up additional shares more cheaply, experts suggest.

If the public takeover offer fails, as expected, Porsche can stealthily build up its stake to up to 50 percent without being obliged to disclose the exact size of its shareholding. And that would help scare off any potential predators.

Motoring.iafrica

[Plex]

FRANKFURT (Reuters) - German sports car maker Porsche launched its obligatory takeover offer for Volkswagen at marginally improved terms on Monday, still aiming for less than a majority stake in VW.

Porsche, which is already the largest shareholder in VW, was required to bid for Europe's biggest carmaker after Porsche's voting stake exceeded 30 percent in March, but it has made clear it is not striving for majority control at this stage.

Porsche is now offering 100.92 euros for each Volkswagen ordinary share and 65.54 euros per preference share, according to bid documents published on the Internet, valuing Europe's biggest carmaker at nearly 36 billion euros (25 billion pounds).

The price for the ordinary shares was as envisaged, while Porsche had originally planned to offer 65.45 euros for the preference shares.

German regulators have approved the offer, which runs until May 29.

VW's ordinary shares were up 0.4 percent at 111.95 euros in early trade, while the preference shares advanced 0.2 percent to 75.01 euros.

Volkswagen declined to comment.

Porsche has said that making a bid now means it would not have to make subsequent mandatory takeover offers should it raise its VW stake in future, thus giving it the flexibility to counter any move on VW by hedge funds or private equity houses.

Porsche and the German state of Lower Saxony, which has around 20 percent of VW, together control more than half the votes in the carmaker.

Porsche has said it wants to defend its close ties with Volkswagen -- which provides content for a third of the vehicles Porsche sells -- in case a German law that limits individuals' voting rights in VW is repealed this year, as expected.

Reuters

[Plex]

VW rejects Porsche's takeover bid

When Porsche decided to exercise its option to purchase more VW stock, its stake was raised to over 30%. That triggered a German law that required the low-volume luxury automaker to launch a bid for all outstanding public shares of Europe's largest automaker. Usually when one company wants to take over another, they offer a stock buyout price that is equal to or greater than the actual market value, but Porsche only offered 101 Euros, even though the stock is trading at about 112 Euros.

VW shareholders unanimously rejected Porsche's offer, citing the offer price wasn't equal to the value of the company. We don't know how much Porsche really wanted to own all of VW, but we're sure they like the fact that they earned $2.75 billion last year due mostly to their partial ownership of Volkswagen.

Autoblog

[Plex]

Porsche on verge of VW takeover

In terms of production numbers Porsche is considered a small player in the auto industry, churning out just under 100,000 cars last year. Volkswagen Group on the other hand is one of the biggest players with the likes of Audi, Bentley and Laborghini under its belt. Despite the size differential, in an odd turn of events Porsche is now on the verge of taking over full control of VW.

Porsche currently holds a 31% stake in VW and at last month�s Frankfurt Motor Show its CEO Wendeling Wiedeking revealed to Automotive News his future plans for both companies. According to Wiedeking, the biggest payoff from the acquisition of VW would be the opportunity for more joint-products. �We want technology and shared investment in new technologies� he explained, �if we can find common components and systems that can be used in Porsche as well as Audis and Bentleys, it would allow all of us to reduce our price position.�

When questioned about what would happen if Porsche was to become a 51% shareholder in VW, Wiedeking explained that it hasn�t been decided and that he already has significant influence in the company because of his position as a supervisory board member. One thing he hopes to see change before any takeover is VW�s fortunes in the U.S., which is exactly what�s happening. VW is undergoing a restructuring plan, which could see it increase output from its Mexico plant as well as the possibility of U.S. production kicking off. The major problem is overcoming the issue of the weak U.S. dollar and local production is the best solution at the moment.

Wiedeking focus instead lies on launching the new Panamera in 2009, which he recently test-drove earlier this year. Apart from boasting that the four-door Porsche was excellent, the only solid info he gave away was that it would be on the market by 2009. Then there�s Porsche�s hybrid technology, which Wiedeking says is not yet ready because a lack of suitable battery technology. Don�t hold your breath waiting for a diesel version either because Porsche has no plans to launch a diesel power model anytime soon.

As for the fate of some of VW Group�s low income earners, � read Bugatti - Wiedeking hinted that there is no room for �hobbies� and that �every brand and every car has to make money.� He concluded the interview by commenting �the name of the game is not to build cars but to make money� and that he�d rather invest in buying up more shares than releasing new products.

Motorauthority

[Plex]

Porsche acquisition of VW shares akin to a �hostile takeover�

In terms of production numbers Porsche is considered a small player in the auto industry, churning out around 100,000 cars per year. Volkswagen Group on the other hand is one of the biggest players with the likes of Audi, Bentley and Laborghini under its belt and whose production numbers run into the millions. Despite the size differential, in an odd turn of events Porsche is on the verge of taking over full control of VW. The sports carmaker already owns a 31% stake in VW and CEO Wendeling Wiedeking has openly admitted to much bigger plans for the cooperation and many fear it could eventuate into a full blown hostile takeover.

Whether this turns out to be a full on takeover is still up in the air but according to VW union boss Bernd Osterloh the decision has already been made and it looks like it�s in favor or Porsche. Speaking in front of a gathering of VW workers, Osterloh said Porsche�s acquisition of VW shares is increasingly becoming a �hostile takeover,� reports Thomson Financial.

Osterloh gave an example of the recent formation of the Porsche Automobilholding holding company, which will control both Porsche and VW. �I mean it has to be really called �Volkswagen and Porsche Automobilholding�,� he commented. The VW union is unhappy Porsche will have several members on the holding company supervisory board despite only employing about 5,000 employees. They argue VW should have more board members since it employs tens of thousands of staff. Unfortunately, it appears as though their claims are falling on deaf ears.

Motorauthority

[Plex]

Porsche rules out Volkswagen merger

*Story Highlights
*Porsche says it does not plan to merge the two car makers
*Porsche is currently Volkswagen's biggest shareholder with 31 percent stake
*Analysts say move was done to protect Volkswagen from a foreign takeover

BERLIN, Germany (AP) -- Porsche sought on Tuesday to allay fears it would attempt to force a merger with Volkswagen, a day after setting the stage for obtaining a majority stake in the fellow German automaker.

Volkswagen cars move down the assembly line at the company's plant in the north-western German city of Wolfsburg.

In a statement printed in German newspapers and signed by Porsche Chief Executive Wendelin Wiedeking and Financial Officer Holger Haerter, the two executives said "there will be no merger of the two companies."

"Volkswagen and Porsche will bundle their strengths in clearly defined cooperative projects and implement them to enhance profitability on both sides," they wrote.

Porsche is Volkswagen's biggest shareholder with a stake of 31 percent.

On Monday, the supervisory board of Porsche Automobil Holding SE authorized Porsche managers to begin steps to gain regulatory approval for taking a majority stake, Porsche said.

CNN

[Plex]

Update: Lower Saxony blocks Porsche�s moves at VW



Update: At a board meeting held April 24th, the German state of Lower Saxony blocked a move by Porsche to reduce the required vote threshold for major strategic decisions at Volkswagen. Lower Saxony owns just over 20% of VW�s shares, and all major decisions for the automaker require an 80% approval of the shareholders, per the company�s by-laws.

Porsche proposed to reduce the approval requirement to 75% - effectively eliminating Lower Saxony�s minority blocking privilege. But the vote failed, garnering only 60% shareholder support - short of the 75% needed to pass the proposal, reports Automotive News. Porsche�s stake in VW is currently at 31%, but the company has plans to increase that to 50% by the end of the year. Lower Saxony justified its move as protective of the 80,000 jobs VW provides inside its borders.

Previous Update: Porsche has released an official statement denying claims made by German media that it was planning to acquire up to 75% of Volkswagen�s shares. The statement said: �The speculation about going up to 75 percent does not consider the realities of VW�s shareholder structure. In view of the fact that the German Federal State of Lower Saxony, as the second major shareholder, holds a stake of more than 20 percent in Volkswagen, the probability of acquiring the necessary shares from the remaining freefloat is very small indeed.�

Original: With Porsche finally confirming last week that it will increase its stake in VW from the current 31% to a majority holding, the only question remaining is how much of VW does Porsche intend on acquiring. For a majority stake Porsche would only need to purchase 50% plus one share of VW but analysts are predicting it could acquire as much as 75% as this would also allow Porsche to benefit more from VW�s profits and cash flows under what�s known as a �domination and profit transfer agreement�.

A report in Germany�s Focus magazine claims Porsche will raise its stake in VW to 75% in order to approve a domination agreement at a shareholder meeting, and that current Porsche execs Wolfgang Porsche and Hans Michel Piech will sit on the new VW board.

Standing in Porsche�s way is the German state of Lower Saxony, which still holds a 20% stake in VW. The council is concerned about VW�s 82,000 German employees and plans to keep all of its shares. Unless Porsche can broker some sort of deal safeguarding the jobs it�s unlikely the Lower Saxony government will agree to Porsche increasing its holding to the domination agreement levels.

Meanwhile, the Porsche family has allegedly increased its stake in Porsche�s holding company to 61.9% from 53.7%, while the Piech family has reduced its stake to 38.1% from 46.3%. Der Spiegel reports that Ferdinand Piech was forced to step down from the four-man Porsche board and will instead sit on the supervisory board of Audi as a result of the latest transaction.

Motorauthority

[Plex]

Germany approves new Volkswagen Law

Porsche didn't win... this round. The German cabinet approved amendments to the Volkswagen Law yesterday, but lawmakers left Porsche's key clause untouched. For those of you who haven't been following this saga, "Volkswagen Law" is the legislation that includes a provision to allow the federal state of Lower Saxony to keep a blocking minority vote in Volkswagen. That minority position is just 20 percent, exactly the amount currently held by Lower Saxony. With Porsche gobbling up shares in VW, intent on capturing a majority position so they can control plant closures, and Lower Saxony determined to protect thousands of jobs in their state... rest assured we haven't heard the last of this.

Autoblog

[Plex]

VW CEO threatens resignation if Porsche interferes with the company

Porsche�s slowly tightening grip on Volkswagen is causing some ruffled feathers among upper management. Porsche is on the verge of increasing its stake beyond 50% in Europe�s largest carmaker and is expected to flex its muscles by controlling everything from product development to labor negotiations. However, the CEO of VW, Martin Winterkorn, is fighting back and has said in an interview that he will resign his post if Porsche interferes with his company�s operations.

One of the biggest fears for Volkswagen is that Porsche may limit Audi�s model range to prevent competition with its own range of sports cars, SUVs and (soon to be available) sedan. According to a German report in Der Spiegel, one Audi insider has said that Porsche is already criticizing the company for its R8 sports car and Q7 SUV. In the future, the insider claims, Porsche may limit the price bracket of Audi vehicles to ensure they don�t compete, however this would damage Audi�s ability to compete with BMW and Mercedes, who are both pushing their brands in to higher � and lower � market segments.

Previously Porsche has also stated that �fun projects� such as the Bugatti Veyron would need to be canceled if they were not capable of making a profit. Both Lamborghini and Bentley are currently profitable so they should be safe, however a slide in sales could potentially mean VW would be forced to sell them off at the behest of its largest shareholder.

Winterkorn has also stated he�s worried about the welfare of Volkswagen workers. Porsche is known to push efficiency at all costs, however Winterkorn said the workers must be treated with �appreciation.�

The rivalry between VW and Porsche�s management teams has taken some strange turns in recent times with Volkswagen being accused of spying on Porsche CEO Wendelin Wiedeking using a baby monitor.

Motorauthority

[MG Man]

if history of mega-auto mergers is anything to go on, VW will drag Porsche down
_________________

I know it's so, for I told me so

[Plex]

Why you say VW will drag Porsche down? Is it not the other way around..Audi & VW especially Audi have cars/suv to compete against Porsche such as the Q7 going up against the Caynne..

One would think Porsche can benefit from TDi technology as we have seen demonstrated in ALMS..

[Plex]

Porsche is not giving up on VW takeover; files request with EU again

According to the European Commission, Porsche is fighting the controversial �VW Law� in its long-standing attempts to acquire controlling interest in Volkswagen. At the end of May, the court ruled in favor of VW, blocking Porsche from buying VW.


This gives context to comments made by the sports car makers CEO, Wendelin Wiedeking, since then, regarding having talks with VW once controlling interest is gained.

As a result of the re-filing with Brussels� competition regulators, the deadline for the EU executive�s competition review of the deal has been moved back to July 23 from today, as per the Automotive News.

Back in March, Porsche�s board authorized the purchase of a majority stake of Germany�s biggest automaker that would total the equivalent of about $15.5 billion.

Leftlane

[Plex]

Updated: EU approves Porsche takeover of Volkswagen

Updated: The European Commission has finally given permission for Porsche to acquire control of the Volkswagen Group, something the German sports carmaker previously confirmed it would do before the end of the year. Porsche�s supervisory body authorized the purchase of a majority stake in Volkswagen, about $15.73 billion worth of shares, as far back as March. This would take Porsche�s current holding of about 31% beyond the 50% mark, giving it control of the entire Volkswagen Group.

The German state of Lower Saxony, however, VW�s second-biggest shareholder with around 20% of voting rights, said it plans to keep its stake. This means that decisions made by Porsche, even with a controlling stake, could be blocked by the state.

Original: Porsche has released a statement announcing plans to increase its stake in Volkswagen Group to more than 50% by the end of the year. Porsche�s current shareholding remains at 31% but an increase beyond 50% would effectively give it control of the German giant.

The statement said the goal is also for Porsche and Volkswagen to continue on the path of growth under the holding company Porsche Automobil Holding but to also retain their independence. �Porsche will also remain Porsche in the future. And Volkswagen will also remain Volkswagen. That is the success formula,� Porsche CEO Wendelin Wiedeking said in the statement.

There remains fears that sports car programs from Audi, Bentley and Bugatti that could potentially compete with Porsche�s sports cars could be canceled once the Stuttgart-based carmaker takes control, reports Automotive News.

The announcement comes less than a week after Germany approved a revised version of its 48-year old VW Law, which mandates that any major strategic decisions within VW would still have to be approved by just over 80% of shareholders. This means that decisions made by Porsche, even with a controlling stake, could be blocked by the German state of Lower Saxony, which still holds 20% of VW.

Motorauthority

[Plex]

Porsche raises VW stake to 35%, offers to buy Audi

Porsche has announced today that it has raised its stake in Volkswagen Group to 35% - up from 31% - and in doing so has made VW a subsidiary of Porsche Automobil Holding under German law. The story doesn�t end there as under the same law Porsche is now required to submit a formal offer to purchase Audi as part of the new shareholder structure.

Following today�s announcement, Porsche CEO Wendelin Wiedeking assured investors that his company has no plans to separate Audi from the rest of the VW Group anytime soon, reports Automotive News. �We see Audi as an integral part of VW and have no interest in taking the company out of the group,� Wiedeking revealed at a conference.

The news comes as Porsche and VW continue to squabble over who will control day-to-day operations once the stock acquisition is completed. VW recently called on Porsche to stay out of its daily operations, with its chairman Ferdinand Pi�ch braking ranks with his Porsche-family cousins to side with VW�s management board. The takeover has also sparked a power struggle between the Porsche and VW labor unions, with VW members angry that Porsche will have more directors on the board despite have significantly lower overall staff numbers to represent.

Earlier this year Porsche released a statement announcing plans to increase its VW ownership to more than 50% by the end of the year � a move that was cleared by the European Commission back in July and which is expected to come to fruition in the near future. However, the German state of Lower Saxony, VW�s second-biggest shareholder with around 20% of voting rights, said it plans to keep its stake. This means that decisions made by Porsche, even with a controlling stake, could be blocked by the state.

Wiedeking said he hoped for a quick resolution to the conflict between the unions over the worker representation issue but failed to offer any solutions.

Motorauthority