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wetstuff · 10-11-2005, 10:53 AM

It wasn't simply because the nice people at Porsche wanted to drop a 'coupla-Billion' on their good friends at VW because they're such nice guys. I gather it's really a poison pill so some slimy slug like GM doesn't simple roll over them like they did to Saab. Here's a better report on it:

___________________________

In a move billed as a defensive maneuver on the part of the Stuttgart-based sports car manufacturer, Porsche AG announced that it planned to acquire roughly 20-percent of Volkswagen AG. The investment is intended to protect the manufacturer of brands including Volkswagen, Audi, SEAT, Skoda, Lamborghini, Bentley and Bugatti from a potential hostile takeover, given the company’s shared chassis and technology projects like the SUV platform on which the Porsche Cayenne is based.

“Dr. Ing. h.c. F. Porsche AG, Stuttgart, seeks to acquire a share of approximately 20 per cent in the stock capital of Volkswagen AG, Wolfsburg, entitled to vote.,” Porsche said in a statement.

The Porsche Cayenne is produced in Volkswagen’s Bratislava, Slovakia plant alongside the Volkswagen Touareg and soon to be joined by the Audi Q7. Production of the Porsche SUV makes up 30-percent of the sports car company’s sales volume, leaving Porsche very vulnerable were Volkswagen AG to fall victim to a hostile takeover.

“Making this investment, we seek to secure our business relations with Volkswagen and make a significant contribution to our own future plans on a lasting, long-term basis,” Porsche’s managing director Wendelin Wiedeking was quoted in the Porsche release.

The company further clarified that it had no intention to acquire Volkswagen. The amount of shares Porsche plans to acquire would not force them to submit a public bid for the takeover of the much larger Volkswagen AG.

“Our planned investment is the strategic answer to this risk. We wish in this way to ensure the independence of the Volkswagen Group in our own interest. This "German solution" we are seeking is an essential prerequisite for stable development of the Volkswagen Group and, accordingly, for continuing our cooperation in the interest of both Companies,” said Porsche’s CEO.

Volkswagen AG is currently protected from takeover via the so-called Volkswagen law. However, a ruling expected in 2007 by the European Court of Justice is expected to leave the German industrial leader exposed to such an occurrence, causing concern in Wolfsburg and Stuttgart alike.

The German weekly publication Der Spiegel broke the story in late September, reporting that the deal could be worth over 4 billion Euros (approx. 4.8 billion dollars) according to Bloomberg.com.

Porsche has increased its share value 44 percent this year, also according to Bloomberg, which places its market value at a healthy 11.9 billion. It’s theorized that the purchase could adversely affect Porsche share pricing, though Volkswagen stock is currently low, which could mean a good purchase price for Porsche.

In a press release responding to Porsche, Volkswagen AG Chairman Dr. Bernd Pischetsrieder welcomed the interest in Porsche, suggesting a stable shareholder structure provided by Stuttgart’s investment would be good for Volkswagen’s long-term future.

10-11-2005, 10:53 AM	#7
wetstuff Registered User Join Date: Jan 2005 Location: Salisbury Maryland Posts: 184	It wasn't simply because the nice people at Porsche wanted to drop a 'coupla-Billion' on their good friends at VW because they're such nice guys. I gather it's really a poison pill so some slimy slug like GM doesn't simple roll over them like they did to Saab. Here's a better report on it: ___________________________ In a move billed as a defensive maneuver on the part of the Stuttgart-based sports car manufacturer, Porsche AG announced that it planned to acquire roughly 20-percent of Volkswagen AG. The investment is intended to protect the manufacturer of brands including Volkswagen, Audi, SEAT, Skoda, Lamborghini, Bentley and Bugatti from a potential hostile takeover, given the company’s shared chassis and technology projects like the SUV platform on which the Porsche Cayenne is based. “Dr. Ing. h.c. F. Porsche AG, Stuttgart, seeks to acquire a share of approximately 20 per cent in the stock capital of Volkswagen AG, Wolfsburg, entitled to vote.,” Porsche said in a statement. The Porsche Cayenne is produced in Volkswagen’s Bratislava, Slovakia plant alongside the Volkswagen Touareg and soon to be joined by the Audi Q7. Production of the Porsche SUV makes up 30-percent of the sports car company’s sales volume, leaving Porsche very vulnerable were Volkswagen AG to fall victim to a hostile takeover. “Making this investment, we seek to secure our business relations with Volkswagen and make a significant contribution to our own future plans on a lasting, long-term basis,” Porsche’s managing director Wendelin Wiedeking was quoted in the Porsche release. The company further clarified that it had no intention to acquire Volkswagen. The amount of shares Porsche plans to acquire would not force them to submit a public bid for the takeover of the much larger Volkswagen AG. “Our planned investment is the strategic answer to this risk. We wish in this way to ensure the independence of the Volkswagen Group in our own interest. This "German solution" we are seeking is an essential prerequisite for stable development of the Volkswagen Group and, accordingly, for continuing our cooperation in the interest of both Companies,” said Porsche’s CEO. Volkswagen AG is currently protected from takeover via the so-called Volkswagen law. However, a ruling expected in 2007 by the European Court of Justice is expected to leave the German industrial leader exposed to such an occurrence, causing concern in Wolfsburg and Stuttgart alike. The German weekly publication Der Spiegel broke the story in late September, reporting that the deal could be worth over 4 billion Euros (approx. 4.8 billion dollars) according to Bloomberg.com. Porsche has increased its share value 44 percent this year, also according to Bloomberg, which places its market value at a healthy 11.9 billion. It’s theorized that the purchase could adversely affect Porsche share pricing, though Volkswagen stock is currently low, which could mean a good purchase price for Porsche. In a press release responding to Porsche, Volkswagen AG Chairman Dr. Bernd Pischetsrieder welcomed the interest in Porsche, suggesting a stable shareholder structure provided by Stuttgart’s investment would be good for Volkswagen’s long-term future.