Volkswagen will pay over 3 billion euros for 42 percent of Porsche

Posted on Monday, 17 August 2009 , 15:08:23 byEmil

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Volkswagen will pay over 3 billion euros for 42 percent of Porsche

The negotiations between Volkswagen and Porsche are approaching fast a conclusion which consists of either a merger or a buyout. Now it is official as the two parts have come to an agreement which states that Volkswagen will buy 42 percent of the shares of Porsche Ag for the sum of 3.3 billion euros. This sum was agreed by the two parts after the analysis that said that the enterprise value of Porsche AG is of 12.4 billion euros. In 2010 new preference shares will be issued and a cash capital increase of Volkswagen AG will also take place during the first half of the next year. Obviously, the transaction will be approved by Porsche SE. Both companies hope that if the regulatory authorities will approve, the full merge will be completed in two years time. If this will not happen, Volkswagen will exercise an option in the agreement that states that they can buy out all the remaining shares of Porsche AG to manage a complete takeover. Security measures have been taken, the State of Lower Saxony reserving its right to appoint 2 members of the supervisory board along with the right to maintain an ordinary shareholding of at least 15% in Volkswagen. Sounds complicated, doesn`t it? This might be the end to the entire story createad around the transaction between Volkswagen and Porsche. We will have to wait and see how the transaction will work out and how the two companies will manage to survive the economical crisis.