Porsche becomes a controlling minority through an increased stake in the VW brand

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Thread: Porsche becomes a controlling minority through an increased stake in the VW brand

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    Porsche becomes a controlling minority through an increased stake in the VW brand

    Porsche requests approval for an increased stake in VW
    Source: www.germancarzone.com



    Stuttgart. Dr. Ing. h.c. F. Porsche AG, Stuttgart, is intending to acquire a further 3.9 per cent of the ordinary shares of Volkswagen AG. To this end, the company has filed an application to the German Federal Cartel Office to request its approval of the planned increase of its stake. Acquisition of the shares would increase the sports car manufacturer’s holding in VW from the present 21.2 per cent to 25.1 per cent of the voting rights, meaning that it would obtain a controlling minority in the Group.

    The Stuttgart company anticipates that the Cartel Office will approve its plans without delay. Porsche would be able to implement the intended stock purchase as soon as approval is granted. Notwithstanding, a decision as to when the measures to increase its stake will be put into place has not yet been made.

    Porsche AG has been contemplating raising its stake since autumn 2005. In order to prevent any price risks, the company has concluded forward-rate agreements, which enable the ordinary shares to be purchased at a fixed price. Even without exercising this option, the sports car manufacturer is the largest single shareholder in Volkswagen AG.

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    Re: Porsche becomes a controlling minority through an increased stake in the VW brand

    Oh drats, here we go again with the Porsche/VW saga.

    TRIVIA: The original VW was in fact designed by Dr Ferdinand Porsche HIMSELF, at the behest of Hitler, even though Porsche based it on some of his earlier prototype he designed for companies like Wanderer (now Audi, and whose name has long since passed into the abyss), Tatra, Zundapp, and NSU (now part of VW, whose name got retired after the Ro80). In fact, Porsche the company got a LICENCE FEE from VW every time a Beetle was produced. Not only that, Porsche influenced many of VW's early models, including the Microbus, the disastrous Type 3 and 4, and other models, including a model that eventually came to be known as the 924/968 (I think this is the right one), when VW pulled out of sports cars. The first models that broke VW free from the Porsche-inherited rear-engine, RWD mold were the Polo/Derby, the Golf/Jetta, and the Scirocco, as well as the numerous Audis and their rebadged VW equivalents that shouldn't be ignored. Since then, VW has often been swinging back and forth in terms of Porsche's involvement - during one of those times, Tiptronic was introduced on Audis and on the VW Passat. To me, this is not suprising at all, given VW's and Porsche's shared roots.

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    Re: Porsche becomes a controlling minority through an increased stake in the VW brand

    It's even more to that, actually - the Porsche family developed two lines, one of which (started by Porsche's son Ferry) continued to run Porsche AG as the carmaking and design business (they even design exquisite coffemakers, as well as help develop engines, e.g. for SEAT in the 80s or GM DAT now - the I6), the other branch (started by Porsche's daughter Louise Piech) runs a number of car distribution companies under the name Porsche, which control VW distribution in countries such as Austria or Hungary. Louise's son, Ferdinand Piech, became the infamous larger-than-life chairman of VW AG, who tried to push the brand even more upscale and grow VAG by taking over numerous prestige brands (like Bentley or Lamborghini), created more overlap than perhaps even GM's mismanagement could and to top that, the ill-fated Phaeton, as he wanted to have a personal limo with the company's logo on the hood (Audi is an acquired brand, not started by the Porsche family).

    I guess the shareholding situation is just going to legitimize the status quo. VW still needs to sort out internal stuff, branding issues and perhaps even spin off some of the redundant subsidiaries, while they could use a non-German, non-European one, like e.g. Mitsubishi.

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    Re: Porsche becomes a controlling minority through an increased stake in the VW brand

    so is porsche throwing good money after bad?

    after all this looks like the doings of the good Dr Piech who appears to be suffering from an advanced case of Alzeimers!

    this deal makes no business logic at all!

    one is an iconic hi tech sports car brand revered all over the world

    the other is an inefficient mainstream manufacturer renowned the world over for apalling quaility!

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    Re: Porsche becomes a controlling minority through an increased stake in the VW brand

    very interesting, so what does this mean for the typcial american consumer i ask?

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    Re: Porsche becomes a controlling minority through an increased stake in the VW brand

    Quote Originally Posted by CobaltSScrazy
    very interesting, so what does this mean for the typcial american consumer i ask?
    not a sh!!t

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    Re: Porsche becomes a controlling minority through an increased stake in the VW brand

    this deal makes no business logic at all!
    It makes a lot of business logic actually. Porsche had heaps of cash at hand, and they already expanded the Porsche business and stretched the brand to the limits. VW shares came quite cheap, and it makes sense to acquire a share in a related company you do a lot of business with.

    What it means for the customer? Not THAT much, I guess, as most shareholding issues, but I think it can only help to have a major shareholder obviously concerned with profitability and streamlining the business (contrary to until-now most influential parties, the local gov't and labor unions), as well as some more design/engineering input from Porsche can be expected, which can only be good for VW (and the customer, I guess).

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    Re: Porsche becomes a controlling minority through an increased stake in the VW brand

    I don't even begin to understand all those companies, VW, Audi, Porsche, Seat..its like they are one big one..but they arne't..
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    Re: Porsche becomes a controlling minority through an increased stake in the VW brand

    Quote Originally Posted by Quickening
    I don't even begin to understand all those companies, VW, Audi, Porsche, Seat..its like they are one big one..but they arne't..
    ya my brain hurts

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    Re: Porsche becomes a controlling minority through an increased stake in the VW brand

    in a French auto blog at http://www.leblogauto.com/2006/06/porsche_veille_.html I posted an interesting comment, here an approximate translation,
    little late comment but better late then never ;-) I wondered if it might be a strategy then Porsche used for a more long-term goal of having the bigger part of the stick in case the VW Group merge with another carmaker?

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    Re: Porsche becomes a controlling minority through an increased stake in the VW brand

    I don't understand how a company like Porsche is able to take on a controlling minority in a behemoth like VW. How does that happen?

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    Re: Porsche becomes a controlling minority through an increased stake in the VW brand

    It happens because a loss-making company without a clear prospect of returning to profitability is worth next to nothing, while a higly profitable and developing company is priceless. Prosche cashed in big time on the Cayenne and had nowhere to spend the cash, while VW's (like GM's) shares come really cheap nowadays. Bob Lutz once said Toyota could theoretically buy GM with their petty cash (the cash-in-hand-and-at-bank position of the BS).

    And why do you get confused with VAG owning subsidiaries and apparently on their way to getting controlled and perhaps later merged with Porsche, when GM controls a host of different brands and subsidiaries they acquired over the years and in its present form resulted from a takeover of the old GM by Chevrolet?

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