VW acquires 49.9% stake in Porsche sportscar operations

• Source: Global Times
• [11:07 December 09 2009]
• Comments

Volkswagen AG announced Monday that it has acquired a 49.9 percent stake in Porsche SE's core sportscar operations for 3.9 billion euros ($5.8 billlion).

"The acquisition will be completed in 2011, and a new integrating automotive group will be formed." Volkswagen said in Monday's statement. As Europe's largest auto maker, Volkswagen plans to buy the retail operations of Porsche Holding Salzburg as its next step.

Last month, Volkswagen's and Porsche's supervisory boards had approved contracts determining details of the complex merger.

In fact, Porsche tried to acquire Volkswagen to hold over 75 percent control of VW's votes. But Porche SE's credit markets contracted because of the economic downturn and demand for luxury cars collapsed, making Porsche's net debt balloon to 11.4 billion euros on July 31.

Volkswagen is now driving the deal and plans to integrate Porsche's sportscar operations as its 10th brand, together with Audi, Skoda and Seat. Porsche will "allow Volkswagen to further expand its position in premium business."

"As an independent brand under the roof of the Volkswagen Group, Porsche will have the potential for its significant additional growth," Volkswagen said, after the integration. The new group will create significant income and cost synergies, Volkswagen's annual operating profit "is expected to increase by some 700 million euros in the long term."

Agencies and Wang Yang contributed to this story