In a strange twist of fate, the knight that rode in to save the damsel is now being rescued by the damsel. It's being reported that VW, Europe's largest carmaker, is planning to turn the tables and buy Porsche in an attempt to retain its independence. This is hugely ironic, since we previously posted a story back in October 2008 at eurotuner.com/news that Porsche was planning to increase its stake in Volkswagen ordinary shares to a total of 74.1%. The aim was to increase this to 75%, paving the way to a domination agreement.
Porsche decided to make this announcement after it became clear there were many more short positions in the market than expected. The disclosure was intended to give financial institutions that had betted on a falling VW share price the opportunity to settle their relevant positions without facing major risks.
Both sides had wanted to form a stronger automotive group that could resist the takeover of VW by a foreign company. However, this change of fortunes comes after Porsche's chief executive Wendelin Wiedeking and financial director Holger Haerter had resigned "with immediate effect".Mr Wiedeking had failed to takeover VW, despite Porsche building a 51% holding in the company. The planned 75% stake failed to happen following the decline in the global automotive market, which left Porsche with substantial debts.
The two companies hope to complete the merger by 2011, according to Christian Wulff, Prime Minister of Lower Saxony, which owns a large stake in VW. "This solution accommodates the interests of all concerned and safeguards the strength and performance of Germany's automotive industry," he said.
Martin Winterkorn, chairman of VW's management board, said the move would "make two strong companies even stronger".Talking in Stuttgart, Dr Wolfgang Porsche emphasized that the resolutions represented a landmark decision and a milestone achievement for the future, adding: "Porsche will preserve the myth and identity of the Porsche brand in the integrated group. That brings new prospects for growth."It was also announced that a negotiated agreement on the principles would specify the procedure and individual transaction steps. In this context, the Supervisory Board welcomed the inclusion of Qatar among Volkswagen's shareholders. It's thought the Gulf state with take a 17% holding in the new company
With this merger, Porsche will become the tenth brand under the VW umbrella, joining Audi, Bentley, Bugatti, Seat and Skoda, as well as its natural competitor, Lamborghini.