The bitter battle for control between Porsche and Volkswagen has moved towards resolution today. Volkswagen has agreed a deal with Porsche to buy a 42 per cent stake in the German sports car maker.
VW will initially pay up to 3.3 billion euros for the stake and a full merger between the two manufacturers is expected by the end of 2011. VW’s CEO Martin Winterkorn has been named as head of Porsche's holding company Porsche SE. All this comes after VW put the squeeze on Porsche's ambitious plans to take over VW. Porsche had borrowed heavily to acquire VW shares. In a bid to reign in Porsche's ambitions VW supervisory board Chairman Ferdinand Piech managed to exert sufficient pressure on Porsche's lenders to call in the loans. At the same time the slowdown in the economy put Porsche and its former boss Wendelin Wiedeking's take over plan in a very tight spot. With the stake sale Porsche's woes will have reduced considerably.
Winterkorn said the deal marked "a new era" for both companies.
“Volkswagen and Porsche today took a decisive step towards a joint future,” he said. “As a group with now 10 strong, independent brands we will further expand our unique global position. More than ever before, we now have what it takes to become the automotive
industry’s number one.”
Winterkorn promised the independence of Porsche would remain and the new group could also take the Auto Union name.
“I am convinced that the outcome of this integration will be the best vehicles for our customers, secure jobs and the creation of long-term value for our shareholders,” said Winterkorn.
Porsche will remain an independent company headquartered in Zuffenhausen.