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Porsche gears up for VW takeover

2009-07-23 09:37
German luxury car maker Porsche opened the door Thursday to a landmark investment by Qatar ahead of a likely tie-up with Volkswagen and said its chief executive Wendelin Wiedeking was stepping down.

Porsche's supervisory committee "unanimously gave power to the management to seal the discussions" with the Gulf state for it to take a stake in the firm, a statement said.

This paves the way for a tie-up with its giant rival Volkswagen (VW), Europe's biggest car maker, it said.

Another statement said later that Wiedeking and financial director Holger Haerter would both resign "with immediate effect."

Wiedeking - said to be the best-paid boss in Germany - was to get a leaving payment worth 50 million euros, of which half would go to a "social foundation."

Porsche also said it would seek to raise at least five billion euros in fresh capital beyond what Qatar might bring to the table, without saying who would take part in that increase.

The decision was taken at a late night meeting of the supervisory committee that began on Wednesday in Weissach near Stuttgart, southwestern Germany, one day ahead of schedule, in a bid to seal a historic alliance with VW, the biggest European carmaker.

"The basis for the creation of an integrated group between Porsche SE and Volkswagen AG has thus been laid," said Porsche, the builder
of the 911 sports car.

The announcements were in line with plans prepared by Wiedeking for the company, which owns about 51 percent of Volkswagen, to pay off at least part of its roughly 10 billion euros of debt.

Wiedeking had sought to maintain the independence of Porsche, which now appears doubtful given the likelihood of a tie-up with VW.
The statement that announced Wiedeking's resignation said both he and Haerter considered the step "a significant contribution to the appeasement of the situation and to support the forming of an integrated car manufacturing company" with Volkswagen.

A power struggle between Wiedeking and the head of VW's supervisory board, Ferdinand Piech, had tarnished both companies, and was said to be blocking a deal with Qatar.

Porsche production chief Michael Macht, 48, is to succeed Wiedeking, the company said.

Meanwhile, Porsche's 12-member supervisory committee, which had at first planned to meet later on Thursday, will examine two competing offers to ensure its future.

The first offer was designed by the Porsche management and Wiedeking. That proposal calls for Qatar to take a major stake in Porsche and to buy VW stock options owned by Porsche.

The second offer came from VW, which would buy Porsche's core automaking activities, making it VW's 10th brand, with Qatar possibly investing in the integrated company.

A meeting of VW's surveillance committee was scheduled for 1000 GMT Thursday in Stuttgart.

Porsche abandoned in May a plan to take full control of VW and its hefty reserves of liquidity, and was forced to find other sources of financing.

The German state of Lower Saxony, which owns 20 percent of VW and holds a veto over its strategic decisions, stood between Porsche and VW's cash.
 
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