Straightline - Porsche to buy controlling stake in VW

Porsche to buy controlling stake in VW

There have been rumors for a very long time that Porsche wanted more of a stake in VW than it currently has. It's been an unofficial on-and-off thing for quite a while.

Now, it is indeed official, as they (Porsche) are going to buy more than 50% of VW, effectively taking control of the company. It should also be noted that Porsche does not plan on merging the two companies.

Is this a good thing? Can Porsche work their "profit magic" on VW? Or will this be just a huge bucket of worms for the sports car maker?

Full story here and here.

Here's Inside Line's take: Porsche Board OKs Purchase of Majority Stake in Volkswagen

Posted by Bob Mar 3, 2008 7:31 am

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Categories: Porsche | Volkswagen | Auto Industry

Comments

steve_ - Mar 3, 2008 9:01 am (#1 Total: 6)

Boise ID United States of America

The rumors have had a strong factual basis for several years now. Porsche has been increasing its percentage ownership of VW since at least 2005 with a ~18% share. That would controlling interest in most companies, but VW had 20% state ownership.

Porsche bumped their ownership up to 30% last March and lined up lots of financing to continue the share purchases.

Part of their reasoning is to avoid a hedge fund (Cerberus!) coming in and messing with their profits from their VW relationship since VW lost their hostile takeover protection last October through EU action.

blueguydotcom - Mar 3, 2008 9:05 am (#2 Total: 6)

San Diego CA

Bad idea. Porsche should look around - succesful car makers buying floundering companies only hurt themselves.

ateixeira - Mar 3, 2008 9:59 am (#3 Total: 6)

Recife, PE, Brazil

This can't be bad for VW. Between Piech's too-big ego and the corruption near the top they've had lately, change can only be good.

sabastian - Mar 3, 2008 10:40 am (#4 Total: 6)

Hmm...I sort of thought that a huge company like VWAG would be buying a small one like Porsche, not the other way around. That said, it'd be nice if Porsche could just stick to making sports cars...

estreka - Mar 3, 2008 10:57 am (#5 Total: 6)

subarctic north - Great Falls, MT

I think it'll be a good thing for VW. The ending of the hostile takeover clause will turn out to be a saving grace for the VW AG.

Keep in mind, Porsche is investing in the entire auto group, not just VW. That includes:
Audi
Bentley,
Bugatti
Lamborghini
Škoda
SEAT
VW
VW Commercial

iancar - Mar 3, 2008 6:35 pm (#6 Total: 6)

For Porsche, it is hard to resist VW's technologies and facilities. Think of W16 Panamera or 911 DSG or Golf Porsche design.