The dispute between Volkswagen chairman Ferdinand Piech and his cousin Wolfgang Porsche, chairman of Porsche, appeared to heading toward resolution as the two companies agreed to a deal in which Volkswagen will pay up to 3.3 billion euros ($4.7 billion) for 42% of Porsche, the Financial Times reported. In another twist in what an analyst described to the FT as “the world’s most complex merger,” Qatar Holding will pay 7 billion euros ($9.9 billion) for a 10% voting stake in Porsche and will acquire a 17% voting stake in VW. VW will also buy Europe’s largest vehicle dealership, Porsche Holding Salzburg, which the FT called “a move that will amount to a rescue of debt-laden Porsche.” The deal is due to be completed in 2011. The Wall Street Journal reported that VW will raise 4 billion euros ($5.7 billion) in capital to complete the deal. The Journal report noted that if the merger doesn’t occur, Qatar Holding may resell its stake in Porsche to the families. Piech, a large shareholder in both companies, had sought to reunite the two firms. Porsche had tried unsuccessfully to take over VW and incurred high debt. According to VW’s CFO, the Porsche and Piech families might end up with 30% to 40% of the merged group; VW’s home state of Lower Saxony will also be a shareholder, the FT reported. (Source: Financial Times, Aug. 13, 2009 and Aug. 14, 2009; Wall Street Journal, Aug. 17, 2009.)
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