The (So Far) Real Deal About the VW and Porsche Wedding
The final version of the pre-nup between Volkswagen and Porsche didn’t quite work out as Reuters had reported. Their sources—two supervisory board members—probably didn’t listen correctly. Shame on them. Here is the real deal:
Reuters correctly cites an official Volkswagen statement: VW will “initially” take a 42 percent stake in the sports car maker Porsche AG “until the end of 2009.” VW will pay up to €3.3b ($4.7b) this year for the initial stake. Then, Porsche SE (which owns Porsche AG and 51 percent of Volkswagen) will be “amalgamated with Volkswagen in the course of 2011.” The supervisory boards of both Porsche and Volkswagen approved it, it’s a go.
In a move that will raise eyebrows in the industry, Volkswagen says that “it is planned that the families will also sell the auto trading business of the Porsche Holding Salzburg to Volkswagen.”
Unbeknownst to many, Porsche Salzburg is the exclusive importer of all things Volkswagen to Austria and owns the largest chain of Volkswagen dealerships in Europe. The chain is present in 18 countries of Europe and in China. Volkswagen has already taken over many independent importers and large dealers in Europe. By buying the Porsche auto trade business, VW is one step ahead in the disintermediation of its dealer network.
Reuters says that “the business, with an enterprise value of €3.55 billion, will be sold by 2011.”
The Gulf state of Qatar will be the third-largest investor in the combined company, said VW CEO Martin Winterkorn. Negotiations are on-going. Their stake is unspecified, but it will be less than that of the second-largest owner, VW’s home state of Lower Saxony, which retains a stake of 20 percent in Volkswagen.
Winterkorn said that the Porsche and Piech families will remain the largest shareholders in the company to arise from the combination of VW and Porsche SE.
As far as the tax speculations of the TTAC commentariat go, just two items: One, the German tax code is very complex and is not to be compared with the American. Two, knowing VW’s CFO Hans Dieter Poetsch and his help at Lower Saxony’s capital in Hannover, we may rest assured that the complicated transaction will be performed in the most tax-advantageous manner.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Great. So, next up is the 2.0 TFSI 911 Quattro? Of even better... a 911 1.9TDI? What a mess to understand!
Or maybe VW will finally make Porsche do the R4 for Audi. I'd love to see the TT replaced with a decent mid-engine, rear (and quattro) driver. Even if Audi was restricted to four-cylinder variants. Boxster dynamics, Audi price, no Porsche stigma ... count me in.