In 2011, Volkswagen acquired Porsche. Porsche was once considered a division of Volkswagen AG (interestingly, besides being the Porsche parent company, VW also owns Audi, Bugatti, and Lamborghini). In that sense, Volkswagen AG is the business that owns Porsche.
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Volkswagen accepts Porsche’s remaining shares for $5.6 billion.
By the beginning of the next month, Volkswagen claims to have reached an agreement to purchase the final 50.1% stake in Porsche that it does not already own.
For the stake, VW will pay 4.46 billion euros ($5.6 billion; APS3.6 billion) plus one VW common share.
Although the two businesses had planned to join by the end of 2011, they have since encountered legal challenges.
In its quest to overtake Toyota as the largest automaker in the world, VW expects the deal to save expenses and increase earnings.
Hans Dieter Poetsch, chief financial officer of Volkswagen, stated that “the expedited integration would allow us to start executing a combined strategy for Porsche’s automotive industry more quickly and to realize major joint projects more speedily.”
Porsche’s pursuit of Volkswagen in time
The sequence of events leading up to the merger is shown below:
Sept. 25, 2005 – Porsche has stated its intention to acquire a 20% interest in VW. It reappears three days later with a 10.3% voting share.
On November 15, Porsche’s supervisory board approves an increase in the shareholding to 29.9%, sparking rumors that it intends to take over the company.
March 3, 2008 – The Porsche supervisory board approves increasing Porsche’s voting interest in VW to more than 50%.
Oct. 26 – Porsche declares plans for a “domination” pact and claims to control 74 percent of VW’s votes thanks to shares and options. Shortsellers taken off guard by the announcement then rush to purchase VW shares, briefly elevating VW to the position of most valuable corporation in the world.
Jan. 5, 2009 – Porsche reports that it has increased its voting stake in VW to 50.8 percent and reiterates its intention to increase stake to 75 percent this year, if circumstances permit.
Porsche announces on May 6 that it will explore a combination with the biggest automaker in Europe rather than continuing its acquisition bid for Volkswagen.
May 12 – Ferdinand Piech, chairman of VW, says Porsche must control its 9 billion euro debt before a deal can be reached.
On July 10, Chairman Wolfgang Porsche invites a special meeting of the supervisory board for July 23 to explore the prospect of Qatar purchasing a stake in Porsche SE for more than 5 billion euros.
On July 23, the supervisory board approves a plan by Porsche’s board to get ready for a capital increase of at least 5 billion euros in cash and/or a contribution in kind, which pave the way for a merger with Volkswagen.
Dec. 4 – State Premier of Lower Saxony Christian Wulff claims Piech and Porsche families will own 30% of the united Volkswagen-Porsche Company, with Lower Saxony holding up to 22% of the company.
Dec. 7, 2009 – Volkswagen claims to have paid 3.9 billion euros to acquire 49.9% of Porsche’s sports car division.
Jan. 25, 2010 – In a “short squeeze” that resulted in the funds losing more than $1 billion from Porsche’s bid to acquire Volkswagen AG VOWG p.DE in 2008, a group of investment firms have filed a lawsuit against Porsche SE and two of its former top officials, accusing them of fraud.
On March 25, Volkswagen said that their rights offer would result in the issuance of 64.9 million new preferred shares at a price of 65 euros apiece, for a total net proceeds of approximately 4.1 billion euros.
On April 29, Elliott Associates, L.P. announced that 18 investment funds had joined the securities fraud and manipulation action against Porsche SE, which now claims losses of almost $2 billion.
July 29 – The CFO of Volkswagen claims that Porsche believes the complaints have no merit and that the integration of the Porsche SE will still happen in 2011.
Oct. 19 – The top executive of both firms claims that the financially challenged auto group Porsche SE believes the merger with Volkswagen by the end of 2011 may not go as planned because of some unsolved legal and tax concerns.
Nov. 30: The CEO of Porsche claims that any merger with Volkswagen before 2014 would carry tax risks of 1-2 billion euros.
Automotive Group
- International Fleet of the Volkswagen Group the Volkswagen Group Vehicle Air Service
Industrial:
Automobile Industrial Motors
International:
- China’s Volkswagen Group India Volkswagen Group American Volkswagen Group Automotive Group of Australia Canadian Volkswagen Group Malaysian Volkswagen Group Brazilian Volkswagen Ireland Volkswagen Group Italian Volkswagen Group South African Volkswagen Taiwanese Volkswagen Group UK-based Volkswagen Group
Volkswagen AG, also known as the Volkswagen Group internationally and with its headquarters in Wolfsburg, Lower Saxony, Germany, is a multinational automobile manufacturer. The business creates, produces, and sells motorcycles, passenger and commercial vehicles, engines, and turbomachinery in addition to providing related services including financing, leasing, and fleet management. It held the title of largest carmaker in the world in 2016 and continued to hold it in 2017, 2018 and 2019, selling 10.9 million vehicles. For more than 20 years, it has consistently held the greatest market share in Europe. On the 2020 Fortune Global 500 list of the biggest businesses in the world, it came in at number seven.
In addition to selling passenger cars under the Audi, Bentley, Cupra, Lamborghini, Porsche, SEAT, Skoda, and Volkswagen names, the Volkswagen Group also sells motorcycles under the Ducati brand, light commercial vehicles under the Volkswagen Commercial Vehicles name, and heavy commercial vehicles under the names of listed subsidiary Traton (IC Bus, International, MAN, Scania and Volkswagen Caminhoes e Onibus). The Automotive Division and the Financial Services Division are its two main divisions, and as of 2008, it had roughly 342 subsidiary businesses. FAW-Volkswagen and SAIC Volkswagen are two other significant joint ventures for Volkswagen in China. The business operates in about 150 nations and has 100 production sites spread across 27 nations.
In 1937, Volkswagen was established in Berlin and incorporated in Wolfsburg with the goal of producing the car that would come to be known as the Beetle. In the 1950s and 1960s, the company’s production increased significantly. It purchased Auto Union in 1965, which went on to build the first Audi vehicles after World War II. In the 1970s, Volkswagen introduced a new line of front-wheel-drive cars, including the Passat, Polo, and Golf, which went on to become its best-selling model. SEAT became Volkswagen’s first non-German brand when the corporation acquired a controlling interest in it in 1986. Volkswagen also gained ownership of Skoda in 1994, Bentley, Lamborghini, and Bugatti in 1998, Scania in 2008, and Ducati, MAN, and Porsche in 2012. Over the past ten years, the company’s operations in China have expanded significantly, making China its largest market.
Volkswagen Aktiengesellschaft is a publicly traded business with secondary listings on the Luxembourg Stock Exchange and SIX Swiss Exchange in addition to its principal listing on the Frankfurt Stock Exchange, where it is a component of the Euro Stoxx 50 stock market index. Since 1988, it has been traded via American depositary receipts in the US; it is currently traded on the OTC Market. In 2013, Volkswagen ceased trading on the London Stock Exchange. 12.7% of the company’s shares are owned by the Lower Saxony government, giving it legally 20% of the voting rights.
The Way We Got Here
The German parliament passed various legislation in order to maintain control over the automobile sector after the government-owned Volkswagen turned privatized in 1960. These statutes essentially said that any shareholder holding more than 20% of the company (the government held 20.1%) could veto any proposed resolution. This safeguarded governmental power and eliminated the chance of a future hostile takeover.
Porsche SE, a German holding firm founded by Ferdinand Porsche’s family and with assets in the automotive sector, started buying shares of the Volkswagen Group in 2005. It continued until both it and the government had veto power, and by 2006, Porsche held 25.1% of the company.
After several years of stock building and denial of takeover intentions, Porsche SE stated in October 2008 that it had acquired 42.6% of VW shares with options on an additional 31.5%. It declared its intention to increase the percentage to 75%, which would enable it to record VW AG’s cash position on its own accounts.
A market short-squeeze was the outcome. The government declared it would not sell its 20.1%, which it still owned. There were very few shares left for anyone else once their shares were added to Porsche SE’s shares. As the short sellers rushed to cover, the price of each share shot up from roughly 200 to over 1,000 euros. Volkswagen soon rose to prominence and briefly held the title of most valuable company in the world.
Porsche SE had to absorb the cash difference between the market price and the sum it had promised to pay outstanding stockholders in order to carry out its plan.
The EU Court of Justice finally determined in October 2013 that a revised Volkswagen statute formally “complied in full” with EU regulations, designating Porsche SE as Volkswagen AG’s controlling shareholder.
Porsche Purchases More Than 10% of VW Common Stock A Profitable Investment for the Sports Car Industry
Stuttgart. Dr. Ing. h.c. F. Porsche AG, Stuttgart, acquired 32,868,462 common shares of Volkswagen AG, or 10.26% of the total, on September 28, 2005. The purchase of these shares is connected to Porsche’s announcement on September 25, 2005, that it would take a roughly 20% ownership stake in VW’s voting stock. According to the anticipated level of involvement, Porsche wants to be represented on the VW Supervisory Board.
Porsche is certain that the investment in VW will be profitable in the long run. This accounts for both possible economies of scale brought about by VW and Porsche’s partnership as well as future dividend payments from VW. As seen by the manufacture of the Cayenne bodyshell or the combined development of a hybrid drive system, Porsche and VW already have close business ties. Porsche has already worked with the automotive group located in Wolfsburg in several capacities.
Porsche can finance the purchase of this VW common shares without taking out loans due to its strong liquidity. While the purchase of VW common stock will temporarily reduce the liquidity of the Porsche Group, the Porsche Group will once again display very positive net liquidity in the 2006–2007 fiscal year thanks to its robust cash flow and exceptional profitability.
Porsche will continue all ongoing projects that have been successfully completed on schedule, including the Panamera development, regardless of this purchase of VW common shares. Additionally, as was always intended, additional variants will further boost the attractiveness of the present model line. Additionally, the business will gradually expand its sales territories. According to preliminary data, the export markets outside of North America experienced the largest growth momentum in the 2004–05 fiscal year, increasing by 21.1% to 40,334 vehicles.
Sales in the just finished fiscal year totaled 13,902 vehicles in Germany (an increase of 14.2%), while unit sales in North America—still Porsche’s largest single market—rose to 34,143, an increase of 8.9%. The Porsche Group sold 88,379 vehicles overall during the previous fiscal year, a 15% increase over the previous year. Provisional estimates show that revenue increased by 6.7% to almost EUR 6.56 billion, which is again another record amount.
The Porsche press database is available at http://presse.porsche.de/, where journalists and media representatives can find additional details and images.
VW purchased Porsche and Audi when?
In 2011, Volkswagen and Porsche amalgamated. The parent business of numerous other luxury automobile manufacturers, such as Audi, Bentley, Bugatti, and Lamborghini, is the Volkswagen Group.
Porsche left VW when?
Yes, technically. In 2011, Volkswagen acquired Porsche. Porsche was once considered a division of Volkswagen AG (interestingly, besides being the Porsche parent company, VW also owns Audi, Bugatti, and Lamborghini). In light of this, Volkswagen AG is the entity that owns Porsche.