More than three years after talks first opened, the VW Group has finally agreed to terms with Porsche to buy the half of the sports car company that it does not already own. Volkswagen will spend £3.5bn on the purchase of the outstanding 50.1 per cent of Porsche shares. The new set-up takes effect on 1 August. Because VW also pays down Porsche’s debts of £1.9bn, the total cost will be £5.4bn.
"The accelerated integration will allow us to start implementing a joint strategy for Porsche’s automotive business more quickly, to realise key joint projects more rapidly, and hence to leverage additional growth opportunities in attractive market segments. It will also enable Volkswagen AG and Porsche AG to concentrate fully on their operating business by making day-to-day co-operation much simpler," said CFO Hans Dieter Pötsch.
There’s no news yet on what these ‘attractive market segments’ might be, but there will be speculation on whether the mooted VW-Porsche budget mid-engined roadster project could now be revived. The other possibility is an entry-level roadster developed with Audi.
The announcement ends an extraordinary period of conflict between the two brands, after Porsche spent more than three years trying to execute a stealthy takeover of the vast VW Group. In early 2009 Porsche had acquired enough shares in VW to have just over 50 per cent of the voting stake. At the time, the company said it was going to attempt to build its share to 75 per cent.
The audacious bid by Porsche was beaten off partly because the state of Lower Saxony owns 20 per cent of VW shares and by VW Group supremo Ferdinand Piech, who is the grandson of Ferdinand Porsche, founder of the sports car maker. After the failure of the bid, Porsche was undermined by the then £7.3bn debts it ran up buying VW shares.
The deal has caused an outcry from some German politicians because VW will not have to pay a significant amount of tax since the deal has been classified as a ‘restructuring’.