Porsche, the German luxury sports car maker has decided to merge with Volkswagen. Volkswagen would acquire a 49.9 per cent stake in Porsche at the moment and will acquire the remaining share in the near future. This will help Porsche pay off most of its debt, which is considerably over € 10 billion.
Porsche’s Chief Executive Officer, Wendelin Wiedeking who led the company for sixteen years is leaving paving way for Michael Macht, the production chief in Porsche. His decision clears the way for a merger with Volkswagen AG as he strongly opposed this move. It is also revealed that Porsche will seek to raise funds possibly from a Qatar based investor too. All this will create the foundation of building an integrated car manufacturing group with Porsche SE and Volkswagen AG.
Porsche announced the moves after an all-night meeting on its future that saw the board agree to seek a capital increase of at least € 5 billion and discussion with a Qatar investment fund. Negotiations have been going with a Qatar based investment fund and the supervisory board of Porsche agreed to sign a deal with it.
The global economic crisis put the brakes on luxury car sales which hampered Porsche’s push to increase its VW stake to 75 per cent and take full control.
The families that own Porsche, the Pieches and Porsches, would control 50 percent of the new VW-Porsche group, the state of Lower Saxony would have a share of 20 percent and the Middle Eastern nation of Qatar would take a stake of between 14.9 and 19.9 percent.
The grandfathers of Wolfgang Porsche, the chairman of Porsche are Ferdinand Piech, former chairman of Volkswagen and Ferdinand Porsche, the famous designer of the Beetle.