Volkswagen Working 'Full Speed' On Porsche Brand Deal - CEO
12 Mars 2012 - 9:09AM
Dow Jones News
Volkswagen AG (VOW.XE) Chief Executive Martin Winterkorn said
Monday that all parties involved are working "full speed" on fully
integrating Porsche Automobil Holding SE's (PAH3.XE) sports car
business into Europe's largest auto maker, but he added there are
"still some hurdles" and didn't elaborate on the timeframe for a
possible deal.
"What I can tell you today is that the integrated Volkswagen and
Porsche group will happen," Winterkorn said, according to a
prepared speech.
Winterkorn is also CEO of Porsche's holding firm after the
company's initial plan to take over control at much-larger
Volkswagen backfired and triggered the departure of Porsche's
former management.
As part of a complex agreement signed in August 2009 to forge a
joint company, Volkswagen and Porsche's holding firm mutually
granted each other put and call options to integrate Porsche's
sports car business into VW if a decision on a fully fledged merger
couldn't be reached by the end of 2011 as planned. As part of the
deal, Volkswagen acquired a 49.9% stake in Porsche's sports car
unit for around EUR3.9 billion.
Porsche's holding firm can exercise the put option to sell the
remaining 50.1% of its sports car business, which is folded into a
company called Zwischenholding GmbH, between Nov. 15, 2012, and
Jan. 14, 2013, or between Dec. 1, 2014, and Jan. 31, 2015.
Volkswagen can exercise the respective call option to buy the
remaining 50.1% stake in Zwischenholding GmbH between March 1,
2013, and April 30, 2013, or between Aug. 1, 2014, and Sept. 30,
2014.
A key aspect of the current evaluation is a potential tax
payment of about EUR1 billion if Volkswagen and Porsche go ahead
with the deal before mid-2014. An earlier deal, however, would
enable Volkswagen and Porsche to reap more cost synergies.
In September, Volkswagen and Porsche announced that the decision
on a full merger including Porsche's holding firm couldn't be made
by the end of 2011, as the financial risks related to lawsuits in
the U.S. and Germany were impossible to quantify. Several
international investment funds and other investors accused Porsche
of cornering the market in 2008 during its ill-fated takeover
attempt of Volkswagen, which collapsed when credit markets dried
up.
-By Christoph Rauwald, Dow Jones Newswires; +49 69 29 725 512;
christoph.rauwald@dowjones.com
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