Auto News

AutoGuide News Blog


The AutoGuide News Blog is your source for breaking stories from the auto industry. Delivering news immediately, the AutoGuide Blog is constantly updated with the latest information, photos and video from manufacturers, auto shows, the aftermarket and professional racing.
 |  Jan 23 2012, 4:30 PM

Along with the Saab saga, the story of VW‘s attempt to buy Porsche AG has been nothing short of a soap opera, with twists and turns at every juncture. After previous attempts by the Wolfsburg automaker to purchase the remaining shares in the smaller Stuttgart concern fell through, it now appears, the deal may be on again.

Both automakers have talked about consolidation for years, yet when former Porsche CEO Dr. Wendelin Wiedeking’s attempt to buy a larger stake in VW fell through, the tables turned; thanks to German law that required Volkswagen to buy shares in Porsche instead.

However, despite VW currently owning more than 49 percent of Porsche and the two companies sharing an upper management structure, there’s still little in the way of cohesiveness when it comes to operations, each firm doing its own thing when it relates to aspects such as R&D, engineering, manufacturing and sales and marketing. This is something that’s proving particularly troublesome, especially for strategic projects, such as upcoming EV vehicles and new lightweight sports cars.

Now, it appears that greater integration between the two companies might finally become a reality this year, information leaked by sources at VW suggest that Porsche has put in an option to sell its remaining 50.1 percent of shares this November.

If that does come to pass, Volkswagen could purchase Porsche outright by the end of the year, however German tax complexities mean that if an outright purchase were to take place before VW can exercise its own call option on the remaining shares (which would be March at the earliest) the merger would be subjected to higher taxation, not something that either company wants.

Martin Winterkorn, CEO of Volkswagen and Porsche, is clearly frustrated at the present lack of integration between the two companies, something he reiterated earlier this month at the North American International Auto Show in Detroit.

“We want to cooperate with Porsche in such a way that as many synergies can be leveraged as soon as possible,” he said, “without needing to have a lawyer stand next to a Porsche employee every time he screws something into a Volkswagen or vice-versa.”

[Source: Reuters]