Porsche wants to close VW deal soon

Porsche said it wants to complete the sale of its remaining 50.1% stake in its sports-car business to Volkswagen AG as quickly as possible,

the

Wall Street Journal

reported.

Critics have said that completing a tax-free deal before August 2014 would be bad for German taxpayers, the

Journal

report noted. Because of a legal loophole, if VW transfers one voting share to Porsche along with the purchase price, the deal would be considered a reshuffling instead of a sale, and about 1.5 billion euros in taxes could be avoided, according to the

Journal.

In 2009, Porsche agreed to sell 49.9% of its sports-car business to VW and plans to sell the remaining stake for about 4.5 billion euros, or $5.66 billion, the

Journal

article said. Porsche and VW granted each other options to transfer the remaining stake to VW if the original plan for a full merger didn’t work out; those options expire in August 2014. Under the planned arrangement, VW will be the core investment of Porsche’s holding company, which holds a 50.7% stake in VW.

The Porsche and Piëch families control 90% of Porsche’s voting stock, the report noted.

The

Journal

article also said institutional investors in Germany and the U.S. have filed suits alleging market manipulation during Porsche’s earlier unsuccessful effort to take over VW. That move was abandoned in 2009. (Source:

Wall Street Journal,

June 26, 2012.)