Volkswagen has reached an agreement with German tax authorities to buy the 50.1% of Porsche’s automotive business that it does not already own for 4.46 billion euros ($5.6 billion). VW will not have to pay the taxes associated with exercising a put-call option,
the
New York Times
reported.
A
Financial Times
report
noted that the boards of VW and Porsche approved the plan, enabling the integration to be completed two years earlier than otherwise might have been the case.
According to the
New York Times,
“The companies agreed to combine in 2009 after Porsche accumulated more than 10 billion euros of debt in an unsuccessful attempt to take over VW.” That attempted takeover divided the Porsche and Piech families. VW chairman Ferdinand Piech “crossed his cousin Wolfgang Porsche to thwart the plan,” the article said.
The
Financial Times
noted, “Porsche’s takeover attempt nearly bankrupted the company and triggered billions of euros in lawsuits from investors who claimed that Porsche misled the market.”
The
Wall Street Journal
reported
that after VW takes over Porsche’s sports-car operation, Porsche SE will be a stand-alone holding company that will continue to own a 32.2% stake in VW. The Porsche and Piech families control 90% of Porsche SE, which will use proceeds from the deal to repay about 2 billion euros in bank loans, the
Journal
article said. (Sources:
New York Times,
July 4, 2012;
Financial Times,
July 5, 2012;
Wall Street Journal,
July 5, 2012.)
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