Porsche and VW are spinning out of control
The increasingly bitter Porsche-Volkswagen saga seems to raise two fundamental questions. The first is who will ultimately take over the other. The second is who do you believe and who do you not. In both cases, unfortunately, it is still too hard to tell.
A month or so ago, it looked as if the two sides and Porsche’s feuding family controlling shareholders had finally come to their senses, agreeing to merge VW and Porsche. After all, Porsche already owns 51 per cent of VW plus a bundle of cash options to increase this stake to about 75 per cent.
Porsche has also become financially strapped having accumulated some €9bn ($12.6bn) of debts in its bid to take over VW. As for the target of its ambitions, VW has the financial resources Porsche now needs. Indeed, it has even lent its predator €700m, and would in turn be quite happy to combine with Porsche and add its luxury sports cars to its extensive range.
But the problem from the beginning has been who would end up in the driving seat of the new merged group. Since Porsche tried and failed in its original bid to secure undisputed control of VW and topple its veteran chairman Ferdinand Piëch – who also happens to be one of Porsche’s main family shareholders – VW has now proposed acquiring Porsche and turning it into one of its many car divisions. Mr Piëch, of course, would remain the master of the combined group.
Source: Financial Times
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