After going back and forth for several years, Volkswagen has finally sealed the deal and acquired Porsche. Back in 2009, Porsche announced it planned to merge with Volkswagen after the Stuttgart automaker fell more than $1.2 billion into debt. Now the roles are reversed, as VW forked over $5.52 billion in trade for a 50.1 percent stake in Porsche. However, Porsche is still a primary holder with 50.7 percent common stock claimed in Volkswagen. The Wolfsburg-based automaker’s latest acquisition makes 12 brands under Volkswagen’s umbrella which also includes Lamborghini, Audi, and Ducati motorcycles.
Even with all the documents signed, sealed, and delivered, the deal remains a perplexing one. The breakdown goes as follows: Porsche Automobil Holding SE was in control of 50.1 percent of Porsche shares but handed those over to Volkswagen upon completion of the deal. As a result, Volkswagen is not in control of 100 percent of Porsche shares thanks to the combination of Porsche’s shares and its own. Since the VW common shares were included in the deal, the new parent company of Porsche was able to side-step an incredibly steep tax bill of more than $1 billion because it was labeled a restructuring instead of a takeover. Volkswagen has already said that Porsche’s earnings this year will go towards the charges accrued with the deal.
With Volkswagen now fully in the driver’s seat, expect Porsche’s line-up to expand from five models to seven. Another sports car that would supposedly sit above the 911 is also being considered as well. With the expansion of Porsche, Volkswagen plans to use that to get ahead of General Motors and Toyota as the world’s biggest automaker by 2018.
Automotive.com’s take: With the acquisition of Porsche, Volkswagen appears to be in good position to give GM and Toyota a run for their money as the world’s biggest automaker in the next six years. Demand for the Passat continues to climb rapidly and Volkswagen has even added a third shift at its Chattanooga plant to assemble an extra 30,000 units.