Porsche Now Holds a Controlling Stake in Volkswagen

By Chris Haak

09.16.2008

Porsche Automobil Holding SE, the holding company that Porsche AG created to hold its automobile holdings, announced today that it has acquired an additional 4.89% of Volkswagen AG, bringing its total voting stake in Europe’s largest automaker to 35.14%, and therefore holds a controlling stake in VW.

Further, Porsche now is legally required to make a tender offer for VW’s Audi subsidiary, although the Porsche CEO Wendelin Wiedeking said that his company has no intention of spinning off Audi as a separate company, saying, “We see Audi as an integral part of VW group and have no interest in taking the company out of the group.”

Porsche also confirmed what it had previously stated, in that it expects to continue to increase its stake in Volkswagen until it exceeds 50%, calling today’s milestone yet another step toward that objective.

All is not rosy in the boardrooms at either Porsche or VW these days, however. Porsche’s takeover of Volkswagen is rather vigorously opposed by labor representatives on VW’s supervisory board (under German law, a portion of each public company’s supervisory board consists of labor representatives). Further, VW’s home state of Lower Saxony, which still holds a 20% stake in VW, feels that its stake should entitle it to have veto power on important decisions, while Porsche feels that veto power should only come with a 25% or greater stake.

The soap opera doesn’t end there. According to a report released over the weekend by German magazine Focus, Porsche chairman Wolfgang Porsche has gained support from the two families that own the carmaker that bears his name to remove his cousin and current Volkswagen Chairman Ferdinand Piëch from his position atop VW. Porsche was angered by Piëch’s abstention in a crucial boardroom vote on a resolution proposed by VW’s labor representatives that required board approval of any cooperation between Porsche and Audi; Piëch’s non-vote allowed the resolution to carry, and complicates Porsche’s takeover plans, much to the delight of VW’s labor representatives.

Where will all of this end? Porsche will get its control of the Volkswagen Group (including Audi), nobody will accept the mandatory tender offer for Audi shares (because it’s priced below market value), Piëch will probably retire, and Porsche will take over the world Volkswagen with a 50% stake in the next few months. And Porsche will continue diluting its brand with overweight SUVs and an upcoming overweight front engine, V8-powered sedan (the Panamera), while also asking its already stretched management to oversee Volkswagen, a company that’s on the upswing at the moment in most places, but that has some immense aspirations for the next decade that will take perfect execution, and a lot of luck, to come to fruition.

You can’t make this stuff up.

COPYRIGHT Autosavant – All Rights Reserved

Author: Chris Haak

Chris is Autosavant's Managing Editor. He has a lifelong love of everything automotive, having grown up as the son of a car dealer. A married father of two sons, Chris is also in the process of indoctrinating them into the world of cars and trucks.

Share This Post On

3 Comments

  1. What happens when Porsche gets a hold of Lamborghini? Or thinks the Audi R8 hits too close to home??

  2. I’m intrigued by the concept that because one car company buys another car company (or takes a controlling stake in one) that suddenly the icon brands of one company become diluted or destroyed to preserve the other?

    When has that actually happened? Sure you might get a mix of parts and platforms but you’d never ever get a model (especially if it was popular & profitable) executed simply because it got in the way of the controller’s model.

    This is purely business – poorly managed and badly played for sure – but still just business. The cars are simply the stock in trade.

  3. Seano,
    Given the presence of the Cayenne, it’s clear that Wendelin Wiedeking (Porsche’s boss) isn’t shy about building whatever he thinks will keep Porsche rolling in dough. And that’s part of the problem.

    Given that mindset, if he thinks –once he gets a hold of Audi– that Porsche will suffer if Audi continues to challenge the 911 and, later, the Boxster/Cayman, he will certainly gut Audi.

    Then, when he wants to move Porsche even more upmarket and into Lambo territory –how else to maintain the high profit margins?– you really think he will want to spend $$$ and brain cells on Lamborghini? Porsche uber alles. (Pardon my German.)

    Jaguar was an iconic, if broken, automaker. Ford buys it, genuinely fixes the business, however in seeking to up market share and challenge BMW, et al. it goes DOWN-market with the X-Type. I’m not saying Porsche will ruin VW Group, but it will do what it thinks is proper –just as Ford did.

    So, I’m just looking out for Audi and Lamborghini. It doesn’t hurt to be a little paranoid 🙂

Submit a Comment

Your email address will not be published.