By on September 9, 2011

Volkswagen and Porsche will need to live in concubinage for a while longer. They will live and work together, they will be seen at parties such as the upcoming IAA in Frankfurt together, they share beds and platforms, but they won’t be officially married.  Volkswagen announced today ”that the planned merger with Porsche SE cannot be implemented within the time frame provided for in the Comprehensive Agreement. Nevertheless, all parties remain committed to the goal of creating an integrated automotive group with Porsche and are convinced that this will take place.”

And why are the nuptials delayed? Says Volkswagen:

“From Volkswagen’s perspective, the continuing legal hurdles mean that it is currently impossible to quantify the economic risks of a merger and therefore to perform the valuation of Porsche SE required to determine the exchange ratio. The main causes of uncertainty are the ongoing proceedings and actions brought against Porsche SE in Germany and the USA for alleged market manipulation.”

There is something else the press release did not mention: 41 banks, funds, sovereign wealth funds  and hedge funds have filed suit against Porsche and Volkswagen on Wednesday, reports Wirtschaftswoche. They claim damages in “three digit billion Euro” say the court documents.

Bringing such a big suit costs a lot of money in Germany: Total court costs can be at least 4.5 million Euro ($6.2 million). Loser pays full court costs and the legal costs of the winning party. If you file a suit like this, you better enclose a check of over a million Euro, or the court won’t lift a finger. This rule keeps frivolous lawsuits to a minimum.

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11 Comments on “Volkswagen Postpones Porsche Wedding While Funds Sue...”


  • avatar
    evan

    I read some other news reports about this earlier, and yup, Porsche is still in big trouble, including a huge stock drop for its holding company and further damage to its credibility.

    I followed this story from its beginnings back when it was clear Wiedeking was out-of-control-stupid for risking Porsche’s independence on nothing more than a ‘bet’ on the markets. The idea that Porsche could take over big brother Volkswagen simply by astute financial dealings was nothing other than idiotic. But of course, what else is new in the world of high finance? It seemed to be working for a short while however, as most news media – and car journalists in particular – simply reiterated the surface story.

    But remember when Volkswagen’s stock absolutely shot through the roof for a while? (Volkswagen was briefly one of the largest companies in the world based on market cap) That was mostly the result of a short squeeze, and the amount of bad blood that created was titanic, and I’m sure a massive reason for the current lawsuits.

    At any rate, this is more evidence that Wiedeking was a plague on Porsche. Naturally, he’ll never have to own up to it or face any consequences.

    • 0 avatar
      The Doctor

      It’s more due to the fact that Porsche was happy to sell 5% of VW’s shares back to the market for a fat profit following the squeeze. I haven’t done M&A for a while but I’m guessing that selling shares of a company you have announced you intend to take over is still a bit of a no-no…

      The rest of their trading activities seem to be like marriage between cousins – it may be legal, but it still makes you faintly queasy.

      PS. Looking at Wiedeking and Haerter I guess Porsche could have probably financed their option positions for a bit longer if they had spent a bit less on Kuchen: http://thedealsleuth.files.wordpress.com/2009/05/wiedeking-porsche-haerter.jpg

  • avatar

    another Rick Perry appears.

  • avatar
    eldard

    If only I can win the lottery tomorrow so I can get a new Panamera before they get tainted with VW electro-turd DNA.

    • 0 avatar
      wmba

      Gee, I wouldn’t buy a car from a socialist paradise like Germany, and they’re union made at that! At least Sweden is a constitutional monarchy.

      Eldard, what you don’t know about governments overseas would fill a large encyclopedia, and what you do know would fit on the head of a pin.

      • 0 avatar
        eldard

        I do know that these socialist paradises are pathetically dependent on selling to the US and China. And that they have the biggest debts in the world. That’s what you get if you have a freeloading culture. lolz

        I’d never buy a car brand new so these countries won’t really get a dime from me. ;)

      • 0 avatar
        tonycd

        If you wouldn’t buy from a car company because its national government was too socialist, would you buy from a car company that functioned under a fascist dictatorship?

        And if not, why not? Where do you draw the line?

      • 0 avatar
        eldard

        I don’t give a flying turd what gov’t whose country the brand came from. Cars from socialist states are usually overpriced. I’ll only buy new Korean if I have to. But since I’m not into cattle class, err, mass market cars, I’ll only buy used since luxury cars are imposed with 100% excise taxes in my country. That makes the cars I desire priced in Bentley territory and buying new would also mean supporting my corrupt govenment. As Top Gear would say, let somebody else take the hit.

    • 0 avatar
      Fusion

      I’m not sure if its DNA or not, but the Panamera’s body is made in a VW factory… ;)

  • avatar
    devilsadvocate

    VW already has one very displeased mistress…Suzuki. Maybe Porsche should back out while they can :)

  • avatar
    slowtyper

    I love the photograph Bertel chose for this piece. Whatever happens, Wiedeking has won. :-)


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