EU ruling paves way for sports car maker to claim chairmanship
14 February 2007

Porsche is ready to take control of Volkswagen following a ruling in the European Union's top court yesterday that will scrap a German law protecting VW from takeovers.

The advocate general at the European Court of Justice ruled that the so-called "Volkswagen Law" prevented the free flow of capital.

The law was established in the 1960s to prevent foreign takeover of VW, and to safeguard German jobs.

It allowed the German state of Lower Saxony, in which VW is based, and which owns a 20.8 per cent stake in the company, to safeguard VW and have a say in its business.

Porsche, under the guidance of chief executive Wendelin Wiedeking and major shareholder Ferdinand Piech, has steadily been building its share of VW.

Currently it owns 27.4 per cent, and it has plans to buy 29.9 per cent. However, as the law stood, even though Porsche owned almost a third of VW, it could not exercise any more than 20 per cent of the voting rights.

Wiedeking has been vocal in his criticism of VW's protected status. Now it seems certain that Porsche will be able to take both the chairmanship of VW's board and also a controlling interest on its supervisory board.

Though Porsche is a far smaller car maker than VW in terms of volume, it has profits only slightly lower than VW's.

The European Court of Justice's ruling is currently only an initial finding, but it is a near-certainty to become law within the next six months.

Add your comment

Log in or register to post comments

Find an Autocar car review

Driven this week

  • Lexus LC500
    Car review
    20 October 2017
    Futuristic Lexus LC coupé mixes the latest technology with an old-school atmospheric V8
  • Maserati Levante S GranSport
    First Drive
    20 October 2017
    Get ready to trade in your diesels: Maserati’s luxury SUV finally gets the engine it’s always needed
  • Jaguar XF Sportbrake TDV6
    First Drive
    19 October 2017
    The handsome Jaguar XF Sportbrake exhibits all the hallmarks that makes the saloon great, and with the silky smooth diesel V6 makes it a compelling choice
  • Volkswagen T-Roc TDI
    First Drive
    19 October 2017
    Volkswagen's new compact crossover has the looks, the engineering and the build quality to be a resounding success, but not with this diesel engine
  • BMW M550i
    First Drive
    19 October 2017
    The all-paw M550i is a fast, effortless mile-muncher, but there's a reason why it won't be sold in the UK