Volkswagen to Take Over Porsche Brand In Accelerated Deal

   By Christoph Rauwald 
 

FRANKFURT--Volkswagen AG (VOW.XE) said Wednesday it will take over in August the remaining 50.1% stake in Porsche Automobil Holding SE's (PAH3.XE) sportscar unit it doesn't already own for 4.46 billion euros in cash plus one common share, as the two German auto makers hammered out an accelerated deal to reap more cost synergies faster.

"The unique Porsche brand will now become an integral part of the Volkswagen Group--that is good for Volkswagen, good for Porsche and good for Germany as an industrial location," Volkswagen Chief Executive Martin Winterkorn said in a statement.

Winterkorn also became CEO of Porsche's holding company after Porsche's ill-fated attempt to take over the much larger Volkswagen collapsed in 2009. After a fierce power struggle that raged for more than two years, Porsche finally had to agree to a deal under Volkswagen's leadership as its debt ballooned in the wake of the financial crisis.

Volkswagen, Europe's largest auto maker by sales volume, agreed at the time to pay EUR3.9 billion for a 49.9% stake in Porsche's sportscar business as part of a complex deal to bail out the holding company. Volkswagen and Porsche also granted each other options to integrate the remaining 50.1% into Volkswagen at a later stage, if a full-fledged merger including Porsche's holding company failed to be finalized by the end of 2011. The two companies had to abandon the plan last year due to legal obstacles.

"Combining their operating businesses will make Volkswagen and Porsche even stronger--both financially and strategically," Winterkorn said.

"We can now cooperate even more closely and jointly leverage new growth opportunities in the high-margin premium segment," he said.

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