Porsche takes controlling interest in Volkswagen

[Equinox]

German authorities approve increase in Porsche’s VW holding

The German Federal Cartel Office is reported to have signalled its approval today of Porsche AG's plans to increase its stake in Volkswagen AG. Porsche spent about €3.5 billion late last year to increase its stake in VW to 18.5%, and subsequently increased it to 21.2%. Porsche had announced in June that it wanted to buy another 3.9% of Volkswagen subject to regulatory approval.

http://www.autoindustry.co.uk/news/07-07-06_6

Porsche will now be in control of VW and its subsideries Audi, and Bugatti and any others.

[coolieman1220]

even better cars now!

[lightweight]

Originally Posted by Equinox

Porsche will now be in control of VW and its subsideries Audi, and Bugatti and any others.

Not quite. Porsche just has incrased the number of shares they own by 3-4%. Nothing dramatic. They aren't in control, they just have a slightly bigger influence than before in decision making.

Having said that, 25% is a quite large percentage, but it doesn't mean that Porsche is in control

[Equinox]

here is more information!

What may be the quintessential sports car maker, Porsche, announced plans to seek a controlling interest in the Wolfsburg-based automotive giant Volkswagen group last month, submitting a proposal to German anti-trust authorities to gain clearance to purchase the remaining stock required. Already owning 21.2 percent of VW (Porsche owned 18.5 percent earlier this year but it has purchased most of its 3.4 percent available options in recent months), Porsche and the Peoples Car have had a longstanding and successful relationship, dating all the way back to Ferdinand Porsches design of the Beetle.

The pairs partnership began with Hitlers requirement for a car for working Germans in the 30s. As the premier German designer at the time, Ferdinand Porsche was charged with the design of the car, and constructed the now famous rear-engine, rear-wheel drive Beetle. With economy being the overall goal, Porsche built the car to be as frugal as possible, tuning the air-cooled engine to be a fuel miser, while Porsches Chief Designer at the time put the body in a wind tunnel to fine tune the shape, making the Beetle one of the first cars to be designed with a thought to airflow.

During World War II, VWs production line tooled up for military vehicles, and the basic Beetle chassis (and even shape) was used in the Kubelwagen utility vehicle and even the amphibious and aptly named Shwimmwagen. After the war, Volkswagen was decimated; quite literally. Allied bombing left the factory in ruins, and as a producer of military goods, everything was seized for reparations. Put under the command of an Englishmen, the factory was considered useless until the English commander painted one of the Beetles green and shipped it back to Allied Headquarters as a demonstrator. Shortly thereafter, the Allied forces within Germany, sorely lacking transportation, opted to purchase 20,000 of the little runabouts.

Fast forward seventy years and little has changed: with the announcement that Volkswagen will build Porsches uber-sedan, the Panamera, the pairs ties are stronger than ever; the two currently sharing the Toureg/Q7/Cayenne platform. As a major parts supplier to the worlds last large-volume independent sports car builder, Volkswagen is obviously incredibly important to Stuttgart, and as such Porsche is not inclined to see Volkswagen fall into the proverbial wrong hands, hence the interest in purchasing the requisite 25.1 percent of Volkswagen stock to give it control.

Porsche has been purchasing Volkswagen stock steadily since they announced a plan to acquire 20 percent of Germanys largest automaker last September, at a cost of $3.8 billion to fend off hostile takeovers, sharing the rest of the stock with Volkswagen and the Government of Lower Saxony. Now, with the approval of the takeover plan being granted late last week, the sports car company is legally allowed to purchase the remaining 3.5 percent needed to gain a controlling interest, effectively putting all fears of a hostile takeover to rest.
he two currently sharing the Toureg/Q7/Cayenne platform. As a major parts supplier to the worlds last large-volume independent sports car builder, Volkswagen is obviously incredibly important to Stuttgart, and as such Porsche is not inclined to see Volkswagen fall into the proverbial wrong hands, hence the interest in purchasing the requisite 25.1 percent of Volkswagen stock to give it control.

Porsche has been purchasing Volkswagen stock steadily since they announced a plan to acquire 20 percent of Germanys largest automaker last September, at a cost of $3.8 billion to fend off hostile takeovers, sharing the rest of the stock with Volkswagen and the Government of Lower Saxony. Now, with the approval of the takeover plan being granted late last week, the sports car company is legally allowed to purchase the remaining 3.5 percent needed to gain a controlling interest, effectively putting all fears of a hostile takeover to rest.

http://car-reviews.automobile.com/ne...lkswagen/1971/

so porsche is in control

[h00t_h00t]

How is 25% the controlling interest when 75% of stock is in the hands of other people?

[The_Canuck]

Repost, and hoot hoot: If alot of people have 2% and you have 25%, who do you thinks running the show?

[taz_rocks_miami]

Originally Posted by The_Canuck

Repost, and hoot hoot: If alot of people have 2% and you have 25%, who do you thinks running the show?

True, if no other investor owns more than 25%, then VW has controling interest now.

[lightweight]

Originally Posted by Equinox

so porsche is in control

I didn't see any part of the text suggesting this

[Equinox]

then you didn't read it very well.

"hence the interest in purchasing the requisite 25.1 percent of Volkswagen stock to give it control." 5th paragraph... last line

"...the sports car company is legally allowed to purchase the remaining 3.5 percent needed to gain a controlling interest," last paragraph, last line.

controlling interest means porsche is in control!

just because they dont own 51% of it doesnt mean anything if VW and the Government of Lower Saxony each own shares and probably other share holders, but porsche owns the most amount of shares. putting them in charge.

[The_Canuck]

Originally Posted by lightweight

I didn't see any part of the text suggesting this

They own 25%...

[Coventrysucks]

As I understand it, Porsche isn't buying the stock to be "in control" and decide VW's future, but merely to stop foreign takeovers, probably the Chinese.

[timeforhell]

They don't have to own half or more than half, that's a common misconception. They just have to be the largest individual shareholder - the majority stakeholder - to be able to make all the decisions. And apparently, with 25.1% that means Porsche calls the shots.

[Equinox]

thank you timeforhell, for explaining it better!

and coventrysucks i agree.

[lightweight]

Originally Posted by timeforhell

They don't have to own half or more than half, that's a common misconception. They just have to be the largest individual shareholder - the majority stakeholder - to be able to make all the decisions. And apparently, with 25.1% that means Porsche calls the shots.

So, last year that they had 3% less, they weren't calling the shots?

I insist that they aren't in control, because the rest of the 75% of the shareholders may have different opinions. Every decision is a matter of lobbying within the decision making units in VW. Some of the decision makers of the VW board will be affiliated to Porsche. But the rest of them aren't.

[h00t_h00t]

Exactly, shareholders have to be kept happy its difficult to control a company when 3/4 of it is owned by other people.