Porsche to buy 20% of VW
Porsche will pay for the Volkswagen stock out of existing capital, the Stuttgart, Germany-based company said yesterday. The investment would be worth about €3.3 billion.
Volkswagen, based in Wolfsburg, Germany, welcomes Porsche interest in “a strategic stake”, said Frank Gaube, a Volkswagen spokesperson.
Volkswagen and Porsche already cooperate on building sport utility vehicles and developing hybrid gasoline-electric engines. The companies have blood connections as well. Volkswagen chairman Ferdinand Piech’s family controls Porsche. That billionaire investor Kirk Kerkorian might buy a Volkswagen stake made the shares rise the most in almost a year.
Porsche already owns less than 5% of Volkswagen’s shares and is exploring how to purchase more.
The investment is intended to prevent “a hostile takeover of Volkswagen”, Porsche said in a statement. “Volkswagen has become not only an important development partner, but also an important supplier for about 30% of unit sales.”
Porsche’s Cayenne sport utility vehicle is manufactured partially at the Volkswagen Bratislava, Slovakia plant that also produces VW’s Touareg SUV. The two companies said they will cooperate to develop hybrid versions of the two SUVs.
Porsche is not buying the approximately 18% stake belonging to the German state of Lower Saxony, Matthias Sickert, deputy spokesperson for the state, said yesterday. “The state is sticking with its commitment to Volkswagen.”
“The state of Lower Saxony welcomes the interest Porsche AG has expressed in becoming a large shareholder in Volkswagen AG,” Christian Wulff, Lower Saxony’s prime minister, said. “This decision provides a good opportunity for Germany’s automobile industry.”
Porsche has said it expects an 11th consecutive year of full-year profit gains after sales reached a record. Revenue in the fiscal year ended July 31 rose 6.8% to €6.5bn.
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