Volkswagen buys Porsche to expand brand portfolio

VOLKSWAGEN-PORSCHE

The verge of Volkswagen and Porsche joining hands finally ended-up. On Sunday, it was announced that Volkswagen Group will take over Porsche from next month. This is following the announcement by the two last September that it would not be possible to implement the merger as it will not be economically feasible until the latter part of 2014.

Porsche brand will also become part of the VW Group through this joint agreement. This will benefit VW while also work to Porsche’s advantage as they both grows in strength and financial stability. The two companies will be able to communicate and cooperate better to bring out new opportunities in the high margin premium segment through investments in pioneering products and technologies.

Through this transaction, both companies along with customers and employees will be benefitted. The two companies together will follow a scheme whereby it will also bring benefits to all shareholders in both companies and will also bring about future developments and lay the basis for better cooperation between the two companies.

Volkswagen acquires luxury car manufacturer Porsche

Under the structure developed jointly by the two companies, Porsche will contribute its operations as a holding company, including its 50.1 per cent Porsche stake, to Volkswagen Aktiengesellschaft, which already holds indirectly 49.9 per cent of Porsche AG. Once the transaction has closed, Volkswagen will hold 100 per cent of the shares of Porsche AG via an intermediate holding company. In return, Porsche will get 4.46 billion Euros and an ordinary share of VW. Apparently the merger will not benefit the German government coffers as it is being classified as a restructuring instead of an acquisition. Due to this, VW will be saving approximately 1.5 billion euros in taxes.

 

What we say? Volkswagen owns lots of luxury car brand like Bentley, Audi, Lamborghini, Bugatti, SEAT and Skoda. Now the company has just added one-more car brand to its line-up, Porsche. Besides these, the company also owns a commercial vehicle manufacturer, the Scania and is still in the verge of joining hands with MAN.

 

Also see –Β VW’s Audi acquires sports motorcycle manufacturer Ducati