Volkswagen In £3.6bn Porsche Purchase Deal

b0dyr0ck2006 · Jul 6, 2012

The move will see Porsche's historic 911 coupe join a VW stable that includes top-end marques of Bugatti and Bentley, mainstream Skoda cars, along with Scania and MAN lorries.
The integration of the two automotive groups is expected to take effect within a month.

The agreement ends a lengthy process to merge the key German firms, after a failed merger in 2011, which followed a 2008 attempt by Porsche to buy its bigger rival.

The 2008 buyout attempt risked bankruptcy of Porsche and triggered multi-billion lawsuits over claims of the company misleading the market.
The subsequent merger attempt brought fears of a £800bn tax assessment but was avoided through a loophole which classified the deal as a restructure and not as a takeover.
The two firms agreed the latest deal after receiving a ruling response from the German tax authorities.

Porsche will contribute its automotive business in full to Volkswagen, which already holds 49.9% holding in the sports car manufacturer.

Once the transaction is completed, Volkswagen will hold 100% of Porsche shares through an intermediate holding company.

In return, Porsche will receive payments totalling some 4.46bn euro (£3.6bn) - plus one ordinary share of Volkswagen.
The cash payment is based on the equity value of 3.88bn euro (£3.11bn) for the remaining Porsche shares, along with a number of adjustment items.

"The consolidation of Porsche's highly profitable automotive business, which is expected to take effect as from August 1, 2012, will have a positive impact on Volkswagen's consolidated profit," the company said.

"With regard to operating profit for the current fiscal year, the initial high depreciation and amortisation charges resulting from the so-called purchase price allocation are expected to largely offset the earnings contribution."

Volkswagen admitted liquidity would be affected in the short term as a result of the deal.

"This will result in a clearly positive non-cash effect of more than 9bn euro (£7.23bn) in the Volkswagen Group's financial result," the company said.

"Net liquidity in the automotive division is expected to decline by a total of approximately 7bn euro (£5.62bn)."
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Baydreams · Jul 6, 2012

Interesting. Mind you, the two companies have always been related anyway. VAPG doesn't have the same ring to it as VAG though.

Birdy · Jul 6, 2012

It could be "PVAG" but that sounds a bit Batman "pow" "biff" "PVAG" but I'm not saying where that person may have been hit

snotty · Jul 6, 2012

Long time coming, I think. Porsche did try it the other way round a few years ago and they nearly went bust, silly boys.

Hope they don't change the name, as "VAG" has given us all a good laugh over the years...

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Volkswagen In £3.6bn Porsche Purchase Deal

b0dyr0ck2006

Baydreams

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Volkswagen In £3.6bn Porsche Purchase Deal

b0dyr0ck2006

Baydreams

Birdy Not Child Friendly

snotty

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