Martin Winterkorn, right, CEO of Volkswagen, and his counterpart from German sports carmaker Porsche AG, Matthias Mueller, laugh before a news conference in Wolfsburg, Germany, on July 5, 2012.
(Photo : Reuters)
With the approval of the plan last week for Porsche SE to be absorbed into Volkswagen Group, the two companies will be one by August 1.
Porsche will receive 4.46 billion euros ($5.47 billion) and one Volkswagen ordinary share in exchange for contributing the 50.1 percent of Porsche not yet owned by Volkswagen.
"The unique Porsche brand will now become an integral part of the Volkswagen Group," Professor Dr Martin Winterkorn, Chairman of the Board of Management for Volkswagen, said in a statement. "That is good for Volkswagen, good for Porsche and good for Germany as an industrial location. Combining their operating business will make Volkswagen and Porsche even stronger - both financially and strategically - going forward. We can now cooperate even more closely and jointly leverage new growth opportunities in the high-margin premium segment through targeted investments in pioneering products and technologies. This will benefit our customers, our employees and our shareholders."
The merger began to take shape in August of 2009, when the companies entered into a Comprehensive Agreement. In September 2011, however, it was announced that the merger could not take place, because German tax guidelines made the agreed-upon put/call options economically unfeasible until the second half of 2014. However, reorganization in German tax code and advance rulings from the relevant tax authorities have made the deal a reality, Volkswagen said.
Volkswagen Group already owns 100 percent of Bentley, Bugatti, SEAT, and Skoda; as well as 99.5 percent of Audi and 89.2 percent of the commercial vehicle manufacturer Scania.