Power Struggle Ends: Volkswagen to Acquire Porsche
Volkswagen is planning to purchase all of sports carmaker Porsche, which has run into massive financial problems linked to its overly ambitious plan to take control of VW. The attempted takeover, which had been financed using loans, ultimately failed because of the credit crunch and ensuing liquidity problems that almost saw Porsche go bankrupt.
SPIEGEL has obtained information that Volkswagen is planning a complete takeover of beleaguered sports carmaker Porsche in a series of two transactions. The company is planning the imminent purchase of 50 percent of Porsche shares and will purchase the remaining shares in the Stuttgart, Germany-based automobile manufacturer in a second step. Once completed, Porsche will become the 10th brand in the stable of Volkswagen, the world's second-largest carmaker.
Porsche headquarters in Stuttgart: VW has won the power struggle between the two companies.
The deal envisions a payout to Porsche Automobil Holding of 8 billion ($11.3 billion), enabling it to pay off the bulk of its crippling debts. VW is also considering acquiring Porsche's Salzburg-based network of dealerships from its family owners, a move that could raise an addition 3 billion for Porsche.
Under the deal, the Porsche and Piëch families, Porsche's shareholders, would obtain 50 percent of the shares in the merged VW-Porsche company. The western German state of Lower Saxony would maintain its 20 percent holding in the company and the door would be open for the emirate of Qatar to purchase between 14.9 percent and 19.9 percent of the company's shares.
German news agency DPA reported Friday that the Porsche and Piëch families had agreed to accept the Volkswagen deal. Reuters also reported the deal was now backed by Porsche supervisory board chairman Wolfgang Porsche, who had fought to maintain Porsche's independence from VW.
SPIEGEL also reported on Friday that Porsche's current CEO, Wendelin Wiedeking, would step down and that the families had agreed to replace him with Porsche production chief Michael Macht.
Wolfgang Porsche denied the report on Friday evening, rebuffing "speculation" that Macht would succeed Wiedeking. Wiedeking, he said, remained head of Porsche AG and Porsche Holding. Deputy chairman of the board and works council chief Uwe Hück also defended Wiedeking. "Wiedeking is chairman of the board and he will continue to be so," he said.
Nevertheless, Wiedeking appears to be preparing for his exit. DPA reported this week that he has hired prominent labor lawyer Jobst-Hubertus Bauer to help him negotiate a severance package, a development also reported by the Financial Times Deutschland newspaper.
Wiedeking has reportedly been a client of Bauer's for some time now. The labor lawyer has negotiated golden handshakes for several top managers totaling millions in recent years. It is reported that Wiedeking could be up for a deal worth more than 100 million.
dsl/spiegel -- with wire reports
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