Porsche sells 49.9% of stakes for 3.9 billion euro to Volkswagen

Posted on Tuesday, 29 December 2009 , 16:12:07 byEmil

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Porsche sells 49.9% of stakes for 3.9 billion euro to Volkswagen

What goes around comes around is an old saying that seems to fit perfectly to the situation created in the Porsche – Volkswagen deal. As you probably remember, some time ago Porsche wanted to take over Volkswagen. Now, things have changed with 180 degrees as Volkswagen has made an announcement in which they said that they bought a 49.9% stake in Porsche AG`s car operations for a sum of 3.9 billion Euro, which is the equivalent of 5.8 billion dollars. This is a very important step toward the plan that Volkswagen has, which is to integrate Porsche sports car company to the Volkswagen Auto Group. (VAG).

Officials of Volkswagen have stated that ``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``.

Volkswagen expects that the integration of Porsche will have as a result an increase of the VAG (Volkswagen Auto Group) annual operating profit by about 700 million Euros in the long term. For those of you who forgot, Volkswagen owns a bunch of other automakers, including Scania, Seat, Bugatti, Audi, Lamborghini, Skoda and Bentley.

Porsche initially tried to buy the Volkswagen Group by taking out billions of Euros in loans, but soon ran out of funding due to the economic crisis, which practically lead to the opposite. This just goes to show you that automakers should be careful with their decisions, because those decisions could backfire on them.

As a personal note, I truly hope that Volkswagen will kill the Panamera and the Cayenne and will try to give back to Porsche their legendary image of a premium sports car maker, a real icon in the fast cars niche. Still, I am aware that this is practically impossible to happen.