VW completes Porsche takeover
FAMILY TIE-UP COMPLETE: Porsche CEO Matthias Mueller (L) and Volkswagen AG CEO Martin Winterkorn address a news conference in Wolfsburg, Germany.
FRANKFURT, Germany - Europe's biggest automaker, Volkswagen, wrapped up its takeover of German sports car group Porsche two years earlier than planned on Wednesday, July 31, in a move it said would strengthen both companies.
In a deal announced in July, the two companies - which had been seeking to merge since 2009 - agreed to move up the integration of their businesses to create economies of scale in an increasingly tough global market.
'FASCINATING VEHICLES' COMING
VW chief executive Martin Winterkorn said: "The path is now finally clear for a bright future together. Even closer co-operation will enable us to significantly strengthen VW and Porsche and expand the group's product portfolio with fascinating new vehicles."
Under the agreement, which they said would unlock the equivalent of R3.26-billion in net synergies, VW paid Porsche's current holding company Porsche SE R45.9-billion plus one VW share for the 50.1% it did not already own of Porsche
VW initially acquired 49.9% in Porsche in 2009 in the first stage of a complex takeover agreement, the completion of which then ran into a number of legal and tax hurdles. The new merger structure will also have the advantage of averting massive tax payments for VW.
Prior to VW's takeover of Porsche, the sports car maker had itself tried, but failed, to swallow the much larger VW, running up more than 10 billion euros of debt in the process.
VW's brands currently include VW, Audi, Skoda, Seat, Bentley and Bugatti and Scania and MAN trucks.