Porsche puts its foot down in VW bid

Porsche says it has gained effective control of VW. Finally. As manoeuvres go, that's hardly the raciest.

Last Updated: 06 Nov 2012

The German sports car maker, favourite among showy petrol heads (oi! - web ed) has raised its voting stake to 35.14% - which it says gives it effective control of VW as it ensures a majority at shareholder meetings. It has described the move, which makes VW an ‘effective' Porsche unit under German shareowner and takeover law, as a ‘milestone'.

Porsche's intention - to get a stake in VW above 50% and seize total control of Europe's biggest carmaker - seems to have been on the corporate slip road for ages. It certainly makes sense: VW's shares have been the best performers on the DAX index of late, trading up when the rest of the auto sector has been flat, and Porsche's performance dropped. What makes it unusual is the scale of ambition. VW has a market value of about €110bn, compared to Porsche's €20bn, and makes about 60 times as many cars every year (6.2m compared to Porsche's 100,000).

So it looks like Porsche is now counting off the junctions, but the road to ownership hasn't been without it's bumps. Despite a long close history - Porsche actually designed the first VW, and Ferdinand Karl Piech, the grandson of Ferdinand Porsche, even chairs VW's supervisory board - there has been tension between the respective managements. VW's works committee has been wary of the takeover and of Porsche boss Wendelin Wiedeking for crossing swords with the trade unions, which are not keen to cede their considerable influence on the VW board. 

The deal also hangs on approval from regulators. Then there's the small issue of the state of Lower Saxony, VW's second-largest shareholder, which has proven keen to exercise an arcane law giving it veto right over major strategic decisions.

Still, it looks likely that Porsche will soon have its hands on VW. If you want to get your hands on a Porsche, meanwhile, this may be a good time. Picking one up second hand in the City may well be a lot cheaper these days.

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Porsche puts its foot down in VW bid

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