Volkswagen announced today that it buys 49.9 per cent stake in Porsche AG as a first step towards an integrated automotive group. This was negotiated by both companies during the negotiations of the contracts regulating the merger of the two companies. Volkswagen confirms that it will acquire a participation in the operating business of Porsche by the end of 2009.
The merger of the two companies is scheduled to take place during 2011. VW says negotiations for this event are going faster than initially anticipated and that a positive development for both companies can be observed.
Volkswagen also said it will continue to preserve the independence and the interests of Porsche.
Volkswagen has paid around 3.9 billion Euros for the 49.9 per cent stake in Porsche.
Volkswagen Press Release:
Volkswagen Aktiengesellschaft will take a 49.9 per cent stake in Porsche AG in a first step towards an integrated automotive group with Porsche. This was agreed between Volkswagen and Porsche SE during negotiations on the contracts of implementation relating to the merger of the two companies. The Comprehensive Agreement announced in August referred to an initial participation in Porsche AG amounting to 42 per cent. The timetable for the creation of the integrated automotive
group remains unchanged: Volkswagen will acquire a participation in the operating business of Porsche by the end of 2009. The merger of Volkswagen AG and Porsche SE is still scheduled to take place during the course of 2011.
The adjustment of the envisaged initial participation reflects the successful progress of negotiations between Volkswagen and Porsche concerning the details of the merger which have been taking place since the Comprehensive Agreement was approved. These negotiations indicate that the projects identified for a closer cooperation have been making swifter
progress than initially anticipated. This positive development for both companies, which is an expression of the compelling industrial logic behind the merger, is now to be underscored by a larger participation in Porsche AG. Volkswagen is thus securing a higher share of the increase in the value of Porsche expected from the joint projects at an early stage. At the same time, Volkswagen remains committed to the phased integration of the two companies and is preserving the independence and the interests of Porsche.
Based on the enterprise value calculated for Porsche AG, Volkswagen is expected to pay approximately EUR 3.9 billion for the participation in the company. An increase in Volkswagen’s preferred share capital is planned for the first half of 2010 in order to refinance the participation and maintain Volkswagen’s good credit rating. Shareholders will be requested to adopt a resolution authorizing such an increase at an Extraordinary General Meeting on December 3.
