Finally, the deal looks like coming to some sort of conclusion. Volkswagen will purchase the 50.1 per cent remaining of Porsche by the beginning of August.
Volkswagen already own 49.9 per cent of the company which they purchased in 2009. Europe’s largest car manufacturer will pay a staggering £3.6 billion for the remaining stake.
In 2009 the deal had already been agreed to merge but that agreement has faced a number of legal battles including a potential major tax fine. The deal would have occurred years back if both companies had their way.
The deal will essentially allow Volkswagen to strive forward towards their goal of reaching that number one slot ahead of General Motors by the year 2018. Volkswagen costs will be saved and greater profits will be made. Hans Dieter, the Chief Financial Officer of Volkswagen said echoed this statement, saying Porsche are now able to join “key projects” and reach it’s potential in a quicker fashion.
That tax bill mentioned earlier equates to 1 Billion Euros if Volkswagen purchased the remaining 50.1 per cent before the end of 2014. However there are certain methods and ways of disguising the deal which allows that tax bill to be avoided. Rather than a takeover, the deal maybe described as a restructuring of the Volkswagen Group. That would mean no hefty tax fine for Volkswagen, even though it is clear to everyone that the deal represents a takeover.
The partnership of Volkswagen and Porsche can be described as perhaps one of the most complicated and controversial in automotive history. Many are certain to be glad that the deal has finally come to a conclusion.
It was originally Porsche that attempted to buy out Volkswagen, which led to the eventual ownership deal. Porsche were struggling to raise funds. The world’s global financial crisis at the time was at fever pitch and led to essential areas of the worldwide car industry crumbling, meaning a loss of cash flow. The Porsche executives who were in charge of the deal were fired and sued for their part in the attempted takeover. Porsche were extremely lucky not to be bankrupted during that original deal.
Porsche will now join the likes of Skoda, Audi, MAN, Bugatti and Bentley in the Volkswagen Group, an empire which is showing no signs of fading.