For over three years, German manufacturer Porsche SE had worked diligently to complete a takeover of Volkswagen. After a series of missteps, the tables have turned. The predator appears to be close to an agreement that would allow its former prey to instead buy Porsche AG -the sports car division- for about €8 billion ($11.28 billion), according to German newspaper Der Spiegel.
An upcoming July 23 meeting of the Porsche supervisory board could finalize a deal that would give Volkswagen 49.9 per-cent of Porsche AG up front, with the rest available for acquisition in the future. Porsche would become the 10th car brand owned by the Volkswagen Group. Other brands include Audi, Bentley, Bugatti, Lamborghini, Seat, Scania. Skoda, VW, and VW Commercial Vehicles.
By selling Porsche AG, the sports car's parent company would be able to pay off a considerable portion of its alleged €10 billion debt. Much of that debt was created in Porsche's failed takeover bid of VW, a deal that was largely backed by bank financing that dried up in the wake of the global economic crisis.
The crisis at Porsche will likely lead to a shake-up at the top of the firm. Company CEO Wendelin Wiedeking is reportedly constructing a €100 million golden parachute so he can bail out of the firm. Production head Michael Macht would replace him at the top of Porsche AG, according to Der Spiegel.
The tale is another chapter in the history of two rival factions of a prominent German family. VW Beetle creator Ferdinand Porsche, who created Volkswagen, was the grandfather of both Ferdinand Piech and Wolfgang Porsche. Piech is the chairman of VW and part-owner of Porsche, while his cousin, Wolfgang Porsche, is the chairman of Porsche SE and a member of the VW supervisory board. The two are considered to be bitter rivals.
Piech looks to have gotten the ultimate win over his competitor, but we will not know for sure until the end of that July 23 meeting.
