Porsche Enthusiasts Club Forum

Volkswagen and Porsche seal £3.6bn merger

By Alistair Osborne | Telegraph – 3 hours ago


Germany’s Volkswagen last night signed a deal to buy the half of Porsche’s car manufacturing operations that it does not already own for €4.46bn (£3.6bn).
The two car makers said they had finalised plans to accelerate the formation of a merged group that will see Porsche’s 911 sports car join a VW empire that combines luxury marques Bentley and Bugatti, budget brand Skoda and the MAN and Scania truckmakers.
The integration is due to take place from August 1, with VW set to pay Porsche’s holding company €4.46bn and one VW ordinary share for the 50.1pc of Porsche’s carmaking activities that it does not already own.
The companies said the quicker than expected integration would generate €320m in net synergies.
The deal marks the culmination of drawn-out efforts to bring the two companies together. A proposed merger of VW and Porsche hit the skids in September last year because the pair were unable to quantify the risks relating to Porsche’s failed attempt to buy its much larger rival in 2008.
Porsche’s takeover attempt nearly bankrupted the company, triggering lawsuits running to billions of euros from angry investors who claim that Porsche misled the market . Porsche has always rejected the accusations.
An alternative attempt to merge threatened to trigger a €1bn tax bill. However, VW and Porsche lawyers finally found a loophole enabling them to avoid tax by classifying the deal as a restructuring, rather than a takeover.

What I find interesting is the major shareholders of VW are two rival grandsons of Ferdinand Porsche, who are Wolfgang Porsche and Ferdinand Piech, and Wolfgang Porsche is the previous owner of 51% of Porsche that now goes to VW.

So in theory, Wolfgang has split his 51% ownership of Porsche in two, given half of it back to himself in the VW share pile and given the other half to his cousin Ferdinand.

Implications for all of us are...

There is a possibility that VW may rationalise the Porsche parts supply into the VW parts network that currently serves VW, Audi, Seat, Lamborghini, Buggatti and Skoda, which is really efficient with more predictable pricing than Porsche randomised pricing, which on some parts may not have been re-analysed since the 1980's other than upward increases in line with inflation.

On the down side, if this happens, the VW parts warehouse may decide lots of parts will not be viable to sell anymore, because global sales will be under 1000 units per annum.

Interesting times ahead I guess.

Sort of a' Mid Life Crisis' for VW

Mid life crisis for sure

I personally think it is a good thing, being part of VW has not hurt Lamboghini and has in fact strengthened them.