Volkswagen takes 49.9 percent stake in Porsche AG

[Mr.B]

Cue Ennio Morricone and the symphonic accompaniment to the endgame: VW has officially taken a 49.9% stake in Porsche. VW paid €3.9 billion ($5.75B U.S.) for its cut, "based on the enterprise value for Porsche AG calculated under a careful due diligence and valuation procedure." That's a few shades more than the €3.3 billion amount VW was saying it would pay a few months ago.

In acquiring Porsche, VW not only gains a premium brand that is still among the most profitable in the business, but VW expects its operating profit to jump by €700 million ($1.03B U.S.) over time due to cost-saving synergies. The purchase won't be finalized until 2011, though, when VW will incorporate Porsche Holding Salzburg, Europe's largest car dealer which also happens to be owned by Porsche.

You can read VW's press release – which has an air of something from Napoleon's PR department after the Battle of Austerlitz – after the jump.

PRESS RELEASE:

Volkswagen takes 49.9 percent stake in Porsche AG
Further milestone reached on the way towards the integrated automotive group with Porsche

Wolfsburg, 07 December 2009 - Volkswagen Aktiengesellschaft has today taken a 49.9 percent stake in Porsche AG. The next important step on the way towards the integrated automotive group with Porsche has therefore been completed, as announced, before the end of the year. The price for the stake is €3.9 billion and is based on the enterprise value for Porsche AG calculated under a careful due diligence and valuation procedure.

Following the Comprehensive Agreement concluded in August, the implementation agreements signed in November and the Volkswagen Extraordinary General Meeting held last week, the stake in Porsche AG represents the next milestone on the way towards the integrated automotive group with Porsche under the leadership of Volkswagen. The acquisition of the trading business of Porsche Holding Salzburg is planned for 2011. The creation of the integrated automotive group is then to conclude with the merger of Volkswagen AG and Porsche SE during the course of the same year.

The combination of the two companies follows a compelling strategic, industrial and financial logic. For the Volkswagen Group, Porsche ideally complements the brand portfolio. The Stuttgart-based car maker will allow Volkswagen to further expand its position in the premium business, which offers particularly strong earnings. In turn, as an independent brand under the roof of the Volkswagen Group, Porsche will have the potential for significant additional growth.

The transaction will have a sustained positive effect on the earnings situation of the Volkswagen Group. With a return on sales of 10.3 percent, Porsche AG is the world's most profitable automobile manufacturer. Volkswagen will in future participate in this business success through its stake. In addition, the planned integration of Porsche in the Volkswagen Group and the associated closer cooperation will realize significant synergies on both the income and the cost side. As a result, the annual operating profit of the Volkswagen Group is expected to increase by some €700 million in the long term.

http://www.autoblog.com/2009/12/08/v...in-porsche-ag/

[team_v]

I read this yesterday on the web.
It's all back and forth; back and forth but hopefully it will see the VAG family rise in quality and sales and drop in price.

Apparently Porsche buying VW shares and the GFC pushed the price of Porsche stocks down allowing VW to buy Porsche at a much more reasonable price.
It's confusing how VW now owns a controlling stake in Porsche which in turn holds a controlling stake in VW.

[DUBY]

About 2 years ago I won a contract to refurbish a 2 bed apartment overlooking tower bridge in London and knew that the girl I was carrying out the work for was a corporate lawyer, after 4 months and the job finishing a 356 appeared in the car park, stunning car.

talked to her boyfriend and it turns out she was the lead broker on porsche's part for the beginning of the deal and the union was originally done to protect porsche

The 356 was a thank you and as far as I know has moved from the parking spot about 5 times in all that time