Nashville Latest City to Install Coulomb Charging Stations for Electric Vehicles
New Findings Show Increased Ocean Acidification in Alaska Waters

VW and Porsche to Merge; New Integrated Auto Group with 10 Brands, Led by VW

At its extraordinary meeting today, Volkswagen AG’s Supervisory Board approved the comprehensive agreement to create an integrated automotive group with Porsche, led by Volkswagen. A corresponding agreement has been negotiated by Volkswagen AG and Porsche Automobil Holding SE, as well as the Porsche and Piëch family shareholders and the employee representatives of the companies involved.

Porsche Automobil Holding SE’ss Supervisory Board has also approved the concept for the combination of the two companies. The comprehensive agreement seals the creation of a joint group with ten strong brands. The plans will culminate in the merger of Porsche SE with Volkswagen. This is expected to be completed in the course of 2011, and will require the approval of both companies' shareholders.

Under this agreement, Volkswagen will initially take a 42.0% stake in Porsche AG by the end of 2009, and it will also see the family shareholders selling the automobile trading business of Porsche Holding Salzburg to Volkswagen. Porsche will remain an independent company headquartered in Zuffenhausen. The details for implementing the concept will be finalized in the coming weeks.

At the same time, negotiations with the Emirate of Qatar to acquire options on Volkswagen shares will continue, and talks will be initiated with Porsche’s financing banks to discuss the overall concept. Successful completion of these discussions would be a further key step on the way to becoming an integrated group. Implementation of the agreement is also subject to the standard approval by the relevant authorities.

Volkswagen and Porsche today took a decisive step towards a joint future. As a group with now ten strong, independent brands we will further expand our unique global position. More than ever before, we now have what it takes to become the automotive industry’s number one. Volkswagen is systematically continuing its successful multibrand strategy by integrating Porsche. Additional new growth opportunities will emerge for Porsche under the umbrella of the integrated group.

—Prof. Dr. Martin Winterkorn, Chairman of Volkswagen AG’s Board of Management

The combination of Volkswagen and Porsche will see the emergence of an integrated automotive group with unit sales of around 6.4 million vehicles and more than 400,000 employees. The key financial figures of the combined company will see a sustained improvement, in particular due to the healthy level of profitability and the expected strong growth of the Porsche vehicle range, according to Volkswagen.

Porsche’s independence in the integrated group will be safeguarded, in line with Volkswagen’s decentralized management model. As is the case today with Audi and other successful group brands, Porsche will retain its identity, while at the same time benefiting from its membership of the integrated group. Under the comprehensive agreement, Porsche will be an independent company headquartered in Zuffenhausen, retaining its independent structures. Additionally, Porsche AG’s employee representatives will be able to participate in the elections to Volkswagen AG’s Supervisory Board following the merger.

Volkswagen anticipates that synergies will be realized quickly, resulting in an increase in annual operating profit in the group by a total of around €700 million (US$1 billion).

To finance its investment in Porsche AG and safeguard its rating, Volkswagen is planning a capital increase in the first six months of 2010 by issuing new preferred shares. The Supervisory Board will address the issue and resolve the details in the near future. Such a capital increase requires the approval of the shareholders, which is expected to be obtained at an Extraordinary General Meeting by the end of this year.

Comments

ai_vin

Concidering Volkswagen and Porsche shared origin I'm surprized they didn't do this sooner.

The Goracle

.

VW and Audi are already the same company. Why not combine the group?

.

ai_vin

That's the plan. The Volkswagen Group contains the car brands Audi AG, Bentley Motors Ltd., Automobiles Bugatti SA, Automobili Lamborghini Holding S.p.A., SEAT, Škoda Auto and heavy goods vehicle manufacturer Scania AB. As an "integrated automotive group" VW believes the various companies should remain largely independent and in the opinion of all parties, this basic concept represents the best possible solution for pooling their strengths.

The comments to this entry are closed.