For all intents and purposes, Porsche is part of Volkswagen. Except for one niggling detail: Officially, Porsche still owns Volkswagen, and not Volkswagen Porsche. See complicated graph. Volkswagen had planned to swallow Porsche whole, and to add it to Volkswagen’s large collection of brands, but there were some nasty details. The most worrisome detail is solved: The tax bill.
Buying Porsche would have been a taxable event to the tune of some $1.9 billion. This had bothered Volkswagen to no end, and its legal team looked for a way out. The way has been found, says Wirtschaftswoche. The out has its price: €118, or $148. That’s the price of one share of Volkswagen stock.
Under the new deal, Porsche SE receives €4.5 billion, and one Volkswagen share. If a share changes hands, then it’s not a sale, but a tax-free restructuring. Schlau, nicht wahr?
The other problem is that hedge funds the world lover are suing Porsche for insider trading, and Volkswagen does not want to buy that risk. Instead, VW will buy the Porsche sports car business and will leave an empty shell behind. Tax-free.