Porsche Agrees Sale to Qatar; Merger with
VW May Complete Before 2011

17 Aug 09

http://www.ihsglobalinsight.com/SDA/SDADetail17491.htm

The merger between Porsche and VW may be completed ahead of schedule, according to VW
Group CFO Hans Dieter Poetsch, but questions are emerging about corporate governance over the process.

IHS Global
Insight
Perspective

Significance Qatar Holding will acquire a 10% voting stake in Porsche and 17% in eventual parent group VW Group as a result of its 7-billion-euro investment in the
German giant.

Implications VW and Porsche are still to enact their own capital increases, VW's will happen in the first half of 2010, whilst Porsche's plans are less concrete, but necessary to pay down the debt pile with which it is struggling.

Outlook Questions over corporate governance have already been raised as the power to appoint record and reputation tarnished from the scandals of a few years ago, VW will confidence in its integrity with external investors.

Porsche take a 17% voting stake in the Volkswagen (VW) Group as it acquires share options held by
Porsche
of the last remaining key parts of the merger, tentatively agreed last week (see Germany: 13
August 2009: VW, Porsche Tentatively Agree Merger Details; May Resurrect Auto Union
Name). VW will purchase 42% of Porsche for around 3.3 billion euro by 2011, initiating a capital increase of 4 billion euro in preference shares in the first half of next year to fund the purchase. In addition, the controlling Piëch and Porsche families will sell Porsche Holding
Salzburg, Europe's largest dealership, to VW.

VW's shares fell 15% on the news as the market determined it had agreed to pay too much for its stake in Porsche, while the latter's share price rose 9% on the news. Furthermore, the appointment lead Porsche Automobil Holding SE, the holding group which controls both companies, raised questions with yourself," said Wolfgang Gerke, an honorary professor at the European Business School and VW-Porsche
Gerke said, adding that insufficient information was available to determine whether either company had suffered a disadvantage. Marco Cabras, a spokesperson for Germany's DSW association for private investors, said: "This isn't a prime example of good corporate governance.
More transparency is desperately needed about decision making procedures and processes."
Meanwhile,
conflicts of interest, adding that if any arose they "could be resolved." Poetsch said that he and his between the two companies. However, Cabras pointed out that as Porsche already has more than
50%
endorse VW's management board. "This issue needs to be resolved," Cabras said.

Meanwhile, a "very optimistic scenario" if the economic and financial markets conditions were favourable, saying also said that the combined group might beat its target of becoming the global market leader before 2018, an ambitious target set by Winterkorn. Poetsch added that the merged entity will seek operation in financial services, joint development projects and the use of similar modules in both million euro in annual operating profit from the merger. Poetsch said in a Die Welt interview that although years to achieve.

Outlook and Implications

With the Qatar investment in place, the remaining financial pieces, namely the VW Group's capital pay down the remaining debt, will follow in due course. VW said it will issue 4 billion euro in preferential on hand to buy the stake without tapping the markets. The decision to go to the markets will mean VW retain its around 11 billion euro cash pile to fund other expansion plans as it seeks to overtake GM and Toyota to become the world market leader by 2018.

Poetsch's the intense pressure on revenues from the global fall in sales the brand has suffered; an improvement in operating performance in this period would be most impressive. Although its operating performance may prove to be a bright spot for Porsche, it will not affect the heavy net loss expected on write downs associated with share options over the attempted takeover.
Furthermore,
in the merger. VW and Porsche already extensively co-operate on the Cayenne and the new
Panamera
engine technology. Potential to share smaller, less conspicuous modules is a given, but unlike
Lamborghini,
do the same with Porsche will remain limited if the brands are to retain their integrity. Thus, the 3 billion euro in synergies and savings will have to some from other areas and deriving that magnitude of cost savings is far from straightforward or obvious. Porsche is expected to raise around 5 billion euro in the form of a share issue, both ordinary and preferred, although no timescale The issues over corporate governance are a concern. It is just a few years ago that VW's supervisory in sackings, convictions and imprisonment. Transparency will be paramount to the new board and Qatar and the State of Lower Saxony will be key to ensuring that the supervisory board of VW maintains Automotive Industry
Analysis, Forecasts, and
Data

Subscribe to Perspectives, our weekly newsletter.

E-mail a Colleague

https://www.volkswagen-media-services.com/medias_publish/ms/content/en/pressemitteilungen/
2010/02/12/volkswagen_group_starts.standard.gid-oeffentlichkeit.html

Basic Search Search help

Extended Search

simpleSearch

engine* = engine... | *engine = ...engine

Search example: engine = engine | engine* = engine.

simpleSearch

/medias_publish/m

Top of Form

Simple Search Search example: engine = engine |

Bottom of Form

Back

Press Release

Volkswagen Group starts 2010 with strong rise in deliveries

Group deliveries grow 41.3 percent in January
Volkswagen core brand up by 46.2 percent
Group Board Member for Sales Klingler: “Successful start, but expect year to be very difficult”
Wolfsburg, 12 February 2010 - The Volkswagen Group started 2010 with robust unit sales growth, delivering 538,500 vehicles to customers in January (January 2009: 381,100; +41.3 percent)*. Compared with the overall world market (+22.3 percent), the Group therefore holds a significant edge over its competitors. One of the main reasons for the good performance is the young and environmentally- friendly model range. The low level of deliveries in the weak month of January 2009 was also a contributory factor in the strong rise.

“We are very pleased with the successful start to the year. It shows we are excellently positioned with our model range. But this good performance must not lead us to underestimate the challenges that lie ahead in 2010. The situation on international automotive markets remains tense,” Christian Klingler, Group Board Member for Sales, commented. “However, there are still extremely share of the expected positive trend thanks to our strong market position,” Klingler added.

High rise in deliveries in Germany

In Germany, the Group brands delivered 71,800 (53,300; +34.6 percent) vehicles in January, of which the Volkswagen core brand sold 44,100 passenger cars (29,500; +49.5 percent) on its home market. The Škoda brand was also very successful, growing deliveries by 73.2 percent to 11,700 (10,700) units. “The aftereffects of the scrapping premium brought yet another boost in
January.
continue to grow our market share,” Klingler said.

Clearly positive trend in the USA and China

In the USA, the Group reported gratifyingly high growth of 40.1 percent in January, delivering
24,600
market (+6.3 percent). The number of vehicles sold by the Volkswagen Group in China again rose January 2009 to 166,900 deliveries (83,900; +98.8 percent).

The a marked increase of 32.6 percent, with the rise in Western Europe even higher, running at 39.1 percent, or 218,900 (157,400) units.

In contrast, Group deliveries in Russia were down on the previous year at 5,100 (6,600;
-22.3
market (-35.8 percent).

Volkswagen Passenger Cars makes exemplary start to the year

The Volkswagen Passenger Cars brand made an excellent start to the year: The core brand sold
359,300
popular Volkswagen model, with global deliveries amounting to 45,600 (29,300; +55.8 percent) units, strong rise in China, the largest individual market, where 135,200 (70,300; +92.4 percent) units were delivered.

High growth rates for Audi, Škoda and SEAT in January

Audi worldwide. The brand from Ingolstadt delivered 16,800 (7,800; +114.9 percent) units in
China,
+66.0 percent) units delivered.

The an increase of 54.5 percent. The brand reported strong growth in China, delivering 14,700
(5,800;
limousine specially equipped for the Chinese market. Furthermore, the brand grew deliveries in the Czech Republic to 4,200 (3,000; +39.7 percent).

SEAT deliveries were also pleasing. The Spanish brand sold 24,300 (19,800; +22.9 percent) vehicles markets in Western Europe. On its home market Spain, SEAT delivered 6,300 (5,000; +25.6 percent) 12,700 (11,300; +12.2 percent) units worldwide.

*
February 2009

Porsche-VW Merger Said to Be Possible
Before 2011

BY DEALBOOK

http://dealbook.nytimes.com/2009/08/17/porsche-vw-might-merge-before-2011-newspaper-says/

Porsche newspaper Die Welt reported, citing VW’s finance chief.

In a “very optimistic scenario” and if the economy and financial markets offer particularly favorable conditions, both companies might be able to accelerate the merger, the finance chief,
Hans Dieter Poetsch, told the paper in Monday’s edition.

Porsche will deliver “very impressive” results for its operating business for the 2009 financial

year and the combined group might beat its target and become world market leader before 2018,
Mr. Poetsch said.

The finance chief said the merged entity will seek cost synergies through joint purchase and logistics, closer cooperation in financial services, joint development projects and the use of similar modules in both groups, Die Welt reported.

While these cost synergies will be achieved “swiftly”, revenue synergies will take some three years to achieve, Mr. Poetsch said, according to Die Welt.

Volkswagen considers itself and Porsche as “partners”, Mr. Poetsch reiterated.

https://www.volkswagen-media-services.com/medias_publish/ms/content/en/dta/oeffentlichkeit/topics/ t2_unternehmen/t2_finanz/t6_weitere_inhalte.standard.gid-oeffentlichkeit.acq/ctx-formate,fmt-formate,mod- all,pid-2/index.html

Volkswagen and Porsche strike a deal, merger coming soon

http://www.carbuyersnotebook.com/volkswagen-and-porsche-strike-a-deal-merger-coming-soon/

Volkswagen has recently sent out a press relesae that tell us they and Porsche have finally reached an agreement that will effectively merge the two automakers by the end of 2011.

The deal went down by Porsche agreeing to sell their 20% VW stock options to the Emirate of Qatar as VW will proceed to purchase 42% of Porsche AG for €3.3 billion. But that’s not all, VW will then pay an additional €3.55 billion for Porsche Holding Salzburg which is one of Porsche’s trading companies.

Let’s hope that this merger is in the best interest of both companies.

Read more about the deal in the press release after the break.

Volkswagen’s Supervisory Board approves Comprehensive Agreement for an Integrated Automotive Group with
Porsche

* Comprehensive agreement reached by the parties: multistage transaction structure, completion expected in the course of 2011

* Volkswagen’s solid financial base and Porsche’s independence will be preserved

* High growth, earnings and synergy potential accompanied by job security

* CEO Winterkorn: Jointly on track to become the worldwide number one

Wolfsburg, 13 August 2009 – At its extraordinary meeting today, Volkswagen Aktiengesellschaft’s Supervisory
Board approved the comprehensive agreement to create an integrated automotive group with Porsche led by
Volkswagen. A corresponding agreement has been negotiated by Volkswagen AG and Porsche Automobil Holding
SE, as well as the Porsche and Piëch family shareholders and the employee representatives of the companies involved. Porsche Automobil Holding SE’s Supervisory Board has also approved the concept for the combination of the two companies. The comprehensive agreement seals the creation of a joint group with ten strong brands.

Under this agreement, Volkswagen will initially take a 42.0 percent stake in Porsche AG by the end of 2009, and it will also see the family shareholders selling the automobile trading business of Porsche Holding Salzburg to
Volkswagen. The plans will culminate in the merger of Porsche SE with Volkswagen. This is expected to be completed in the course of 2011, and will require the approval of both companies’ shareholders. Porsche will

remain an independent company headquartered in Zuffenhausen. The details for implementing the concept will be finalized in the coming weeks. At the same time, negotiations with the Emirate of Qatar to acquire options on
Volkswagen shares will continue, and talks will be initiated with Porsche’s financing banks to discuss the overall concept. Successful completion of these discussions would be a further key step on the way to becoming an integrated group. Implementation of the agreement is also subject to the standard approval by the relevant authorities. Prof. Dr. Martin Winterkorn, Chairman of Volkswagen Aktiengesellschaft’s Board of Management, stated: “Volkswagen and Porsche today took a decisive step towards a joint future. As a group with now ten strong, independent brands we will further expand our unique global position. More than ever before, we now have what it takes to become the automotive industry’s number one. Volkswagen is systematically continuing its successful multibrand strategy by integrating Porsche. Additional new growth opportunities will emerge for Porsche under the umbrella of the integrated group. Following constructive talks, we have agreed a solution that reflects the interests of all parties. I am convinced that the outcome of this integration will be the best vehicles for our customers, secure jobs and the creation of long-term value for our shareholders.”

The integrated group combines sound strategic logic, an attractive financial proposition and social responsibility

The combination of Volkswagen and Porsche will see the emergence of an integrated automotive group with unit sales of around 6.4 million vehicles and more than 400,000 employees. The key financial figures of the combined company will see a sustained improvement, in particular due to the healthy level of profitability and the expected strong growth of the Porsche vehicle range.

The creation of this integrated group with ten strong brands led by Volkswagen follows a compelling industrial logic: the integration of Porsche AG and the automobile trading business of Porsche Holding Salzburg will allow
Volkswagen to further extend its position as the world’s leading multibrand group. The integrated group will hold a leading position in terms of global market presence, segment coverage, technology and innovation, global purchasing power and manufacturing base. It offers attractive growth prospects thanks to its superior modular systems, solid financial position, effective management and excellent employees.

Porsche’s outstanding technical expertise and its unique legend will enhance the value of Volkswagen’s brand family. The product ranges are highly complementary, and adding Porsche will enable a significant expansion of the integrated group’s position in the premium segment. With the addition of the development center Weissach, the group’s innovation leadership will be further enhanced. Additionally, the integration of Porsche Holding Salzburg’s highly profitable automobile trading business will considerably strengthen the Volkswagen Group’s distribution activities. Porsche Holding Salzburg has a footprint in 13 Eastern European and five Western European countries, as well as in China, and its pronounced retail expertise already makes it a key partner today for Volkswagen’s market success.

Porsche’s independence in the integrated group will be safeguarded, in line with Volkswagen’s proven decentralized management model. As is the case today with Audi and other successful group brands, Porsche will retain its identity, while at the same time benefiting from its membership of the integrated group. Under the comprehensive agreement, Porsche will be an independent company headquartered in Zuffenhausen, retaining its independent structures. Additionally, Porsche AG’s employee representatives will be able to participate in the elections to Volkswagen AG’s Supervisory Board following the merger.

Volkswagen’s proven management model will enable all potential synergies to be realized quickly. In the long term, this will increase annual operating profit in the group by a total of around EUR 700 million.

With new, additional models, unit sales of Porsche vehicles will increase substantially. CEO Winterkorn: “We want to write a new chapter in a history of sustainable growth. This will help us safeguard high-quality jobs in Germany for the long term and create new ones.”

Transaction structure: a fair price and solid financing

Under the comprehensive agreement, the combination of Volkswagen and Porsche to form an integrated group with ten strong brands under a common group-wide leadership will be achieved in several stages, and is expected to be completed in the course of 2011. Commenting on the overall concept that has been agreed, Hans Dieter Pötsch,
Volkswagen Aktiengesellschaft’s CFO, said: “It combines the greatest possible degree of certainty that the transaction will run smoothly with the creation of a stable ownership structure, a fair price and very solid financing.
It also reflects the interests of all parties and safeguards Volkswagen’s solid financial position and strong rating.”

In the first step, Porsche Automobil Holding SE plans to sell most of its options on Volkswagen shares to Qatar.
Successful completion of these talks, which are already at an advanced stage, would be a key step on the way to becoming an integrated automotive group. Exercising the options would result in Qatar becoming Volkswagen’s third anchor shareholder.

At the same time, Porsche will seek the support of its lending banks for the overall concept that has now been agreed to further safeguard its financial stability, and will negotiate a new financing structure with them.

Provided that these talks are successful, and if Qatar acquires the portfolio of options, Volkswagen will then take a
42.0 percent stake in Porsche AG by the end of 2009. Based on the comprehensive due diligence and valuation process that has been performed a value of EUR 12.4 billion has been determined for the company as a whole, including the expected synergy effects. On this basis, and after factoring in Porsche’s debt, Volkswagen is expected to pay approximately up to EUR 3.3 billion for the 42.0 percent stake.

To finance its investment in Porsche AG and safeguard its rating, Volkswagen is planning a capital increase in the first six months of 2010 by issuing new preferred shares. The Supervisory Board will address the issue and resolve the details in the near future. Such a capital increase requires the approval of the shareholders, which is expected to be obtained at an Extraordinary General Meeting by the end of this year.

Another component of the overall concept is that the family shareholders will sell to Volkswagen the operating business of the separately owned Porsche Holding Salzburg. An enterprise value of EUR 3.55 billion has been determined for Europe’s largest automobile trade company, with unit sales of most recently 474,000 vehicles. The trading business can be sold starting in 2011. In this case too, however, Porsche Holding Salzburg will retain its current structure and responsibilities as an organizational unit, and family members will remain represented in the company’s governing bodies.

The family shareholders will use the bulk of the proceeds from the sale of the trading business of Porsche Holding
Salzburg to increase the ordinary share capital of Porsche SE. This capital increase is designed to further improve
Porsche SE’s financial situation and will happen before the intended merger with Volkswagen. The increase in the ordinary share capital will be accompanied by the issuance of new Porsche SE preferred shares.

Following this, a financially stable Porsche SE will be merged with Volkswagen – the final step in the combination of the two companies. The merger requires the approval of the general meetings of both companies. Completion is expected in the course of 2011.

The precise shareholder interests following a merger are not yet final and depend on the volume of any capital increases, the cash flow and liquidity or debt situation of the two companies, and on the merger ratio for
Volkswagen and Porsche SE established at the time of the merger. However, the Porsche and Piëch family shareholders will remain the largest shareholders at Volkswagen, and the State of Lower Saxony will continue to be the second-largest shareholder in the Volkswagen Group in the future.

According to the comprehensive agreement, the status of Lower Saxony will in future be explicitly anchored in
Volkswagen’s articles of association. It is envisaged that Lower Saxony will be entitled to appoint two members of the Supervisory Board. The existing blocking minority rule will be reaffirmed – at Volkswagen, key decisions by the
Annual General Meeting require a qualified majority of more than 80 percent of the share capital represented at the
AGM.

There are also plans to offer a substantial investment opportunity to the worldwide employees of the integrated

automotive group. The employee participation model will be implemented via an employee foundation to be established by the group works councils of Volkswagen AG and Porsche AG.

Popularity: 22% [?]

This
Vehicles, 2011 Vehicles, Cars, Porsche, VW. You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.

Published Nov 21 2010 by WSJ.com: What's News US

http://www.silobreaker.com/vwporsche-merger-moves-step-closer-5_2263880189530341376

VW-Porsche Merger Moves Step Closer

http://online.wsj.com/article/SB10001424052748703567304575628602671192406.html? mod=rss_whats_news_us&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj %2Fxml%2Frss%2F3_7011+%28WSJ.com%3A+What%27s+News+US%29

The merger of German auto makers Volkswagen and Porsche moved a step closer Friday after
Porsche said it will make disputed tax and interest payments on stock-option transactions.

By HARRIET TORRY And KATHARINA BECKER

FRANKFURT—The
Holding SE moved a step closer Friday after Porsche said it will make disputed tax and interest payments Porsche had previously contested the tax payment on the stock options, as the company considered fiscal 2010 annual report. However, Porsche earmarked €1.35 billion in provisions pending the outcome Following the €626 million payment, the remaining provision of €719 million will be dissolved with the provisions won't lead to a further tax expense, the company added.

Last finalized in 2011, could be delayed until several legal and tax issues have been resolved. Porsche stressed sports car operations to VW a possible alternative.

Porsche's distribution business Porsche Holding Salzburg GmbH to Volkswagen for €3.3 billion. The sale was struggle spanning several years.

Porsche credit markets dried up and Porsche agreed to a merger under Volkswagen's leadership.

Legal
Porsche to federal court claiming more than $2 billion in damages, remain a hurdle for the deal.

The funds allege that Porsche misled investors during its attempted takeover of Volkswagen—a claim Porsche has denied.

Porsche, VW might merge before 2011: report http://www.reuters.com/article/idUSTRE57F16420090816

FRANKFURT | Sun Aug 16, 2009 10:09am EDT

FRANKFURT (Reuters) - German carmakers Porsche (PSHG_p.DE) and Volkswagen
(VOWG.DE) might merge in 2010 already instead of 2011 as currently planned, German newspaper Die Welt reported, citing VW's finance chief.

In a "very optimistic scenario" and if the economy and financial markets offer particularly favorable conditions, both companies might be able to accelerate the merger, VW Finance Chief
Hans Dieter Poetsch told the paper's Monday edition.

Porsche will deliver "very impressive" results for its operating business for the 2009 financial year and the combined group might beat its target and become world market leader before 2018,
Poetsch said.

The finance chief said the merged entity will seek cost synergies through joint purchase and logistics, closer cooperation in financial services, joint development projects and the use of similar modules in both groups, die Welt reported.

While these cost synergies will be achieved "swiftly", revenue synergies will take some three years to achieve, Poetsch said, according to Die Welt.

Volkswagen considers itself and Porsche as "partners", Poetsch reiterated. (Reporting by Peter
Dinkloh; Editing by Jon Loades-Carter)

VW, Porsche merger faces risk, delay: analysts http://www.reuters.com/article/idUSTRE63745R20100408

FRANKFURT | Thu Apr 8, 2010 12:40pm EDT

FRANKFURT
(PSHG_p.DE) still faces significant legal and tax risks, analysts said on Thursday, citing details from Volkswagen's prospectus for last month's capital increase.

The risks stem from potential tax liabilities and hedge fund lawsuits alleging former Porsche executives VW, Europe's largest automaker.

These risks could force the companies to delay or abandon a planned merger of Porsche
Automobil
March.

A

A spokesman for Porsche says the risks listed in the prospectus stem from a legal document which A banker familiar with the matter said it was too early to say whether Porsche and VW's merger plans needed to be delayed.

Another banker said the level of risks factors listed in the prospectus was "unusual."

In a note published on Thursday, Bernstein Research analyst Max Warburton said the risks could force VW to pay cash for a remaining 50.1 percent stake in Porsche's sports car business.

This, in turn, could be bad for Porsche and VW.

For raising," Warburton wrote.

A said. VW's rules could "place a considerable burden on Porsche's financial resources and liquidity position, and SE."

In them of fraud in a "short squeeze" that caused the funds to lose more than $1 billion.

Potential planned merger, VW said in the prospectus.

"The planned target structure of the integrated automotive company with Porsche may not be achieved or may only be achieved at a later point," it said.

Porsche SE racked up billions of euros in debt in an attempt to acquire 75 percent control of
VW's
reverse takeover by VW.

The

(Reporting by Edward Taylor and Philipp Halstrick, additional reporting by Hendrik Sackmann in Stuttgart)

CEO sees 30 percent chance Porsche merger will fail: report

http://www.bestgrowthstock.com/stock-market-news/2010/10/30/ceo-sees-30-percent-chance- porsche-merger-will-fail-report/ FRANKFURT (Reuters) – There is a 30 percent chance investors holding preferred shares in
Porsche SE (PSHG_p.DE: Quote, Profile, Research) may not be able to swap their stock for equity in cash-rich Volkswagen (VOWG_p.DE: Quote, Profile, Research), the companies’ top manager said in comments published in newspaper Automobilwoche.

The chief executive of both companies told the German industry newspaper that the probability of a merger under the leadership of VW has diminished as potential legal and tax liabilities have grown in recent months.

“The chances are 70 to 30 that it comes to that,” Martin Winterkorn said in the comments published on Saturday. “Our lawyers are involved in a close examination (of these risks).”

The that Volkswagen assigned a 30 percent probability the merger would not go through in order to account for the value of financial derivatives linked to Porsche’s sports car business under IFRS.

Volkswagen has a put-call option in place that allows it to acquire the remaining 50.1 percent of
Porsche’s sports cars activities for a strike price of 3.9 billion euros ($5.41 billion) independent of any merger, but the purchase could involve tax risks as well should the option be exercised before the end of 2014.

Winterkorn and Poetsch said earlier this month that legal and tax issues could delay the deal beyond the end of next year, when the merger contract expires.

Porsche management had launched a risky takeover of Volkswagen, which nearly bankrupted
Porsche last year after it could no longer afford to prop up the elaborate structure of VW derivative positions used to build its stake.

Porsche settled call options on VW stock to the Gulf state of Qatar for a heavy loss in July 2009.

(Reporting by Christiaan Hetzner; editing by Sue Thomas)

CEO sees 30 percent chance Porsche merger will fail: report

• Out of Gas.Detail Only Available By: Goldhaber, Michael. American Lawyer, May2010, Vol.
32 Issue 5, p62-66, 4p, 2 Color Photographs
Subjects: CONSOLIDATION & merger of corporations; DERIVATIVE securities; SALE of PORSCHE Automobil Holding SE
Database: Business Source Premier

{

Check Article Linker for more information
• 3.

Periodical

Porsche increases stake in VW.Full Text Available By: Fernandez, Joe. Marketing Week
(01419285), 10/23/2008, Vol. 31 Issue 43, p60-60, 1p
Subjects:
AUTOMOBILE industry & trade; PORSCHE AG; VOLKSWAGENWERK; Motor Vehicle

Add to folder Remove from folderRelevancy:

Body

Mon, 27 Oct 2008

Porsche a majority holding in VW by the end of the year. The sports car manufacturer announced it had increased in the car market.

It far short positions in the market than expected. The disclosure should give so called short sellers
—
Volkswagen — the opportunity to settle their relevant positions without rush and without facing major risks."

Porsche was already the largest shareholder in VW, holding about 35%. It now says it wants to own 75% of of the marque by 2009, reaching the 50% mark by Christmas.

It adds: "Assuming the economic framework conditions are suitable, the aim is to increase to 75% in 2009, paving the way to a domination agreement. The intention to increase the
Volkswagen stake to above 50% in November/December 2008 remains unchanged."

Porsche take on the competition.

The strategic decisions made at Volkswagen — to be scrapped by the European Commission later this year.

~~~~~~~~

By Joe Fernandez

Copyright its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright articles for individual use.

2. Analyse the main reasons behind the strategy, and its consequences for stakeholders.

VW Finance Chief Hans Dieter Poetsch said the merged entity will seek cost synergies through joint and the use of similar modules in both groups (Reuters 2011).

The key principle behind buying a company is to create shareholder value over and above that of the sum of the two companies, following that two companies together are more valuable than Aktiengesellschaft, the integrated Porsche VW group combines sound strategic logic, an attractive financial proposition and social responsibility (VW 2009).

But although costs synergies are apparent and have been forecasted “swiftly”, revenue synergies will take some three years to achieve according to Mr. Poetsch. There have been critics to the synergy expectations for 700 million Euros ($990 million) of annual savings from Volkswagen
AG's planned merger with Porsche SE. (Reuters 2009, 2011). Given the delay of the merger and the lack of post-merger financial results (expected with the
Half-yearly financial report on July 2011), market entry is probably the easiest prediction that we can do in a preliminary analysis for the Porsche VW merger acquisition. Growth by acquisition may be preferable in this case, as it could be too costly to grow into a market organically. When looking at integrated automotive group, it seems logical to think that we could be looking at VW as a company that decides to enter a new market choosing an acquisition to gain entry into new markets. As stated in the Supervisory Board of Volkswagen Aktiengesellschaft, the creation of this integrated the integration of Porsche AG and the automobile trading business of Porsche Holding Salzburg will allow Volkswagen to further extend its position as the world's leading multibrand group. he integrated group will hold a leading position in terms of global market presence, segment coverage, attractive growth prospects thanks to its superior modular systems, solid financial position, effective management and excellent employees (VW 2009).

With the acquisition of BellSouth, AT&T aim was to expand the reach of its network facilities, increase its business customer base and enhance the opportunity to market its wireless services to that customer base. AT&T they were able to gain access to licenses that cover a population of
296 million which is in the region of 99% of the 2005 U.S. population (U.S. census bureau). This includes one hundred of the largest U.S. metropolitan areas. After the merger, AT&T Inc brought BellSouth and Cingular under the AT&T Inc. umbrella.
This resulted in 100% ownership of Cingular which in turn meant full access to BellSouth’s customer states such as Alabama, Tennessee, Louisiana, Mississippi, Georgia, Florida, North and
South Carolina. This allowed AT&T to rebrand Cingular as AT&T Mobility and then to market itself in the southern states. AT&T could now make business decisions in its wireless segment without having to consult with its former partners (BellSouth). AT&T was also able to avail of the in the southern states. With control over Cingular, AT&T was able to increase its customer base and wireless service in 2005 accounted for 24% of total revenue. After the acquisition in 2007 the revenue Beginning in 2007 there was a transfer of the majority of the wireless traffic to the advanced
GSM network. Prior to the 2006 acquisition, important decisions such as moving to a GSM network would have required extensive consultation with BellSouth, but now decisions could be made of hastening the introduction of next-generation products, for example the iPhone. The main advantages from the ownership of Cingular is the increase in market share in the wireless new products. An additional key constituent for AT&T in the acquisition was the acquirement of
Yellowpages.com

Internet directory publisher YPC. Previous to the acquisition, AT&T Inc had a 66% economic interest in YPC and BellSouth had a 34% interest in YPC. Both had equivalent voting rights and representation an entirely owned subsidiary of AT&T.