Porsche VW Seen Close To Deal – US-FOREX.US
It looks like the auto industry’s biggest soap opera is almost over. German carmaker Volkswagen is on the verge of buying half of Porsche’s car-making business, according to German press reports, while the sheikh of Qatar is buying a stake in Porsche and options that control 20% of Volkswagen shares, from Porsche. This could put an end to months of bitter wrangling to reach an agreement over a tie-up involving the smaller sports car maker, which already owns a more than half of VW. The news comes a day after Porsche’s chief executive, Wendelin Wiedeking, delivered a speech to employees about the next steps in the company’s future. Porsche denied rumors that Wiedeking was leaving the company.Shares of Volkswagen fell 1.8% to 57.00 euros on Thursday morning in Frankfurt, while shares of Porsche rose 2.6%, to 51.63 euros Talks between the two carmakers have stalled several times in the last few months thanks to complicated family issues-the companies are chaired by two cousins-and two very different balance sheets. While Volkswagen
is cash rich, Porsche
has debts of around 10 billion euros , built up as part of its attempt to gradually take over its mass-market rival by buying stock options. Porsche has struggled financially. Its been unable to sell its options on the market lest it watch Volkswagen’s share value spiral downwards, while refinancing its debts by the skin of its teeth. Having abandoned plans to take over Volkswagen, Porsche’s chairman and co-owner, Ferdinand Piech, earlier this year started pushing for Volkswagen to buy Porsche’s sports car business and add a 10th brand to its lineup. The latest reports suggest Piech may well have got what he wanted.
The sticking point in talks has been over what sort of role Piech will play in the combined company, relative to his cousin and Porsche chairman Wolfgang Porsche. The carmakers’ supervisory boards are due to meet separately in Porsche’s home town of Stuttgart on July 23. Far from being the end of the soap opera, this could just be the beginning.