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It’s official: Porsche is Volkswagen’s majority shareholder

Porsche & Volkswagen logosOn Monday Porsche increased its stake in Volkswagen AG to 50.76 per cent, after securing a deal to purchase more ordinary voting shares.

Porsche wanted to reach majority shareholder status before Christmas. Unsurprisingly, the delicate and sometimes acrimonious negotiations between the two companies took Porsche past their deadline.

Despite owning over half the shares, German law still stands in the way of Porsche having a controlling interest over Volkswagen. To do that, according to law, a company usually requires 75 per cent of a company’s stock. Although, further frustrating Porsche, is the Lower-Saxony ruling that requires an 80 per cent stake in Volkswagen to gain a controlling share. Porsche has unsucessfully challenged this ruling.

The Lower-Saxony government owns 20.1 per cent of Volkswagen stock.

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Porsche Volkswagen

Porsche wants full control of Volkswagen before Christmas

Porsche & Volkswagen logosWell, before December actually. Porsche will hold present their annual results to the media on 26 November, and if they have their way between now and then they will have increased their stake in Volkswagen to an “absolute majority”.

This Sydney Morning Herald article explains a few of the hurdles Porsche still has to resolve before being able to fulfill their lofty ambitions. The major stumbling block is the Lower Saxony government’s blocking vote—despite only controlling 20.1 per cent of the stock. The European Commission is involved and back in July, when assessing any likely competition issues, they declared “Porsche will continue to face several strong, effective competitors”.

With just over 35 per cent of Volkswagen shares, Porsche already has effective control of the company, however formalising the majority shareholding is becoming more acrimonious by the day. Volkswagen objects to Porsche’s wish to gain access to Audi technology and is doing all it can to stand in the way of what is most probably an inevitable takeover.

Whatever happens, it is fascinating viewing and considering the possible permutations of technology and platform sharing certainly whets the appetite.

Source: Reuters, autoblog & SMH

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News Porsche Volkswagen

Porsche ownership of Volkswagen draws closer

Porsche & Volkswagen logosPlans by Porsche to take full control of Volkswagen have drawn closer with a recent ruling from the European Commission declaring “the transaction would not significantly impede effective competition”. Although, the deal is not sealed yet.

The German government and the state of Lower Saxony have laws in place that preclude any full takeover of Volkswagen, however, this ruling seems to be on borrowed time with the European Commission willing to take the matter before an EU court if need be. The Commission believes competition will not suffer if Porsche achieves its ultimate aim stating, “The commission’s examination of the transaction showed that horizontal overlaps between Volkswagen and Porsche are limited and that, for all car segments concerned, Porsche will continue to face several strong, effective competitors”.

Porsche has previously stated it wants to increase its stake in Volkswagen to 36 per cent by this September, which would give them strong influence over Volkswagen’s manufacturing decisions. Once the green light has been given from competition regulators Porsche will look to take a controlling interest by lifting its stake over 50 per cent.

Source: Deutsche Welle