VW to acquire Porche for $11.28 billion

Source: Indiantelevision.com Team

MUMBAI: The automobile sector has been in turmoil for quite a while now. If General Motors acquired Lotus and Saab and Chrysler bought Lamborghini to hand them over to new proprietors over the next 20 years, Land Rover exchanged hands in a series of deals to finally land with the Tatas.

Walking similar tracks today is Volkswagen, the largest automaker in Europe. The company has agreed to buy out Porsche's sports car unit, Porsche AG, in entirety for approximately $11.28 billion.

The deal will operate under a two-step transaction process wherein Volkswagen will purchase 50 per cent of Porsche initially. In the second stage, the company will buy the remaining shares of Porche

With the complete acquisition of this, Porche will become the 10th brand to enter the Volkswagen basket.

As per the deal, the Porsche and Piëch families, Porsche's shareholders, will attain 50 per cent of the shares in the merged VW-Porsche company.

While the western German state of Lower Saxony will continue to preserve its 20 per cent holding, the deal will open opportunities for the Qatar emirates to purchase between 14.9 per cent and 19.9 per cent of the company's shares.


Also, according to Siegel, the current deal will see Porsche present CEO Wendelin Wiedeking step down and get replaced by Porsche production chief Michael Macht.


In a bid to put an end to the step-sibling rivalry, Porsche was looking forward to buying a 75 per cent stake in Volkswagen. However, hit by the economic crisis, the company's plans hit the shelf as its debt swelled to over $14.22 billion.