Volkswagen stepped up its efforts to become the world’s number-one carmaker on Thursday by buying up the remaining part of Porsche that it did not already own, and in the process ended an epic takeover struggle between the two German brands.
The deal, in which the Beetle’s maker will swallow up the Spyder’s, completes a saga that started in 2008 and that led to rollercoaster share prices, court battles and divided families.
VW will buy up the remaining 50.1% of Porsche for €4.46bn (£3.6bn), it announced on Thursday.
The luxury sports car manufacturer will thus be integrated into VW, joining the likes of Audi, SEAT, Bugatti, Bentley and Skoda (which are VW subsidiaries), and Scania (in which the company has a stake).
A takeover of one by the other has been on the cards since October 2008 when Porsche failed to buy up Volkswagen, racking up more than €10bn in debts but falling short of the 75% of shares targeted. The German car company responded by purchasing 49.9% of Porsche.
Attempts to push through a full-blown merger were delayed by separate legal actions in the US, brought by investors who claimed that they were misled by Porsche ahead of its abortive takeover attempt – an allegation that Porsche denies.
Tax liabilities were also a deterrent to a swift union, although an element of the deal now announced – the one common share that VW will add to the purchase price – reportedly provides the loophole that will allow the merger.
Martin Winterkorn, chief executive of VW, said: “Together we are more capable than ever of becoming the best auto company on the planet.”
Hans Dieter Poetsch, chief financial officer of Volkswagen, added: “The accelerated integration will allow us to start implementing a joint strategy for Porsche’s automotive business more quickly and to realise key joint projects more rapidly. It’s a great deal for Volkswagen, both financially and in operative terms.”
Bringing Porsche under VW’s control should cut costs and boost overall earnings. VW’s stated aim is to see its multi-brand empire sell 10m vehicles a year to become the world’s biggest producer by 2018, pulling clear of rivals GM and Toyota.
The American and Japanese carmakers have vied to be the world’s biggest in recent years, although the forthcoming definitive figures for 2011 may show that VW overtook Toyota after the earthquake, tsunami and nuclear crisis of that year in Japan.
Joint projects under way include Porsche’s next model, the Macan compact SUV, due to launch in 2014. Other Porsche models will soon be assembled in VW’s own plants.
Ousting GM and Toyota from the top spots will depend on VW, the predominant player in Europe, making bigger inroads into the American market. It opened a factory in Chattanooga, Tennessee, last year, while a new Audi plant will follow in Mexico.
VW and its various brands are continuing to make progress in emerging Latin American and Asian markets.
Audi has announced its June sales figures of cars to China; they continued a year-on-year rise, reaching 20% higher than a year ago. So far in 2012 Audi has sold 194,000 cars in China, almost 40% more than in the first half of 2011. Audi said that the sales made it the most popular premium brand in China.
The new Porsche deal – a “restructuring” that can avoid the tax bill that previously kept the VW champagne on ice – brings an end, two years earlier than thought, to the saga that has not just troubled lawyers and hedge funds but pitted branches of the Porsche dynasty against each other.
Porsche’s chairman, Wolfgang Porsche, was ultimately thwarted by his older cousin, Ferdinand Piech, VW’s chair.
Car sales accelerate
UK motorists have defied the recession by boosting car sales to more than one million in the first half of the year.
According to figures from the Society of Motor Manufacturers and Traders (SMMT), 189,514 new cars were sold in June, a 3.49% increase on the same month last year. That took the total for the year to 1,057,680, a 2.72% rise on January-June 2011.
Private sales grew strongly last month, rising 9.8% compared with June 2011, and are up 8.7% for the first half of this year. Total new car sales, which also include fleet car sales, for the April-June 2012 period have risen 4.8%. The SMMT calculates that year-end sales will reach 1.95m, just ahead of last year’s 1.94m total.
SMMT chief executive Paul Everitt said: “Despite domestic and international economic concerns, UK motorists are responding positively to new products and the latest fuel-efficient technology.
“The industry has performed better than expected in the first half of the year and we will now need to work hard to sustain growth.”
There was a 47.8% rise in sales of alternatively-fuelled vehicles last month, while diesel sales also rose and have accounted for 51.2% of total sales in the first half of 2012.
The best-selling models in June were the Ford Fiesta, Vauxhall Corsa and Ford Focus.
guardian.co.uk © Guardian News & Media Limited 2010