Volkswagen AG announced today that it will take a 49.9 percent stake in Porsche AG in a first step towards a merger with the Stuttgart sports car manufacturer.
“This was agreed between Volkswagen and Porsche SE during negotiations on the contracts of implementation relating to the merger of the two companies,” Volkswagen said in a statement. “The Comprehensive Agreement announced in August referred to an initial participation in Porsche AG amounting to 42 percent.”
Volkswagen said that it will acquire a participation in the operating business of Porsche by the end of 2009 and is looking to complete the full merger process during the course of 2011.
“Volkswagen is thus securing a higher share of the increase in the value of Porsche expected from the joint projects at an early stage, the German automaker said. “At the same time, Volkswagen remains committed to the phased integration of the two companies and is preserving the independence and the interests of Porsche.”
Volkswagen is expected to pay approximately EUR 3.9 billion ($5.82 billion USD) for Porsche.
– By: Omar Rana