Tuesday, June 30, 2009
Volkswagen delivers Porsche deal ultimatum
Volkswagen has delivered Porsche an ultimatum to accept a tie-up between the two carmakers in a deal that would be backed by the Qatar Investment Authority.
Porsche hit out at its rival after Volkswagen issued a deadline of yesterday (Monday, June 29) for the luxury carmaker to agree to a merger plan. Volkswagen subsequently denied that an ultimatum had been issued, although reports suggested that the company was pushing for a tie-up by the end of June.
Wolfgang Porsche, head of Porsche's supervisory board, called the ultimatum from Volkswagen and its key shareholder, the German state of Lower Saxony, 'damaging'.
He added: "Ultimatums do not belong in the 21st century. We won't be blackmailed."
The proposed tie-up would lead to a complicated system of cross-ownership between the two groups and their main shareholders.
Porsche currently holds a 51 per cent stake in Volkswagen while Porsche is controlled by the Porsche and Piech families.
Under the proposed terms, Volkswagen would take a 49.9 per cent stake in Porsche.
The merged company would be 40 per cent owned by the Porsche and Piech families, with Lower Saxony taking 20 per cent, the Gulf state of Qatar 15 per cent via its Qatar Investment Authority investment vehicle, with a unnamed sovereign wealth fund taking a further 5 per cent.
While Volkswagen is pushing for the deal, Porsche remains in talks with the Qatar Investment Authority and could still look to agree a deal exclusively with the sovereign wealth fund to get itself out of financial difficulties. The manufacturer has debts of €9 billion.
DATED: 30.06.09
FEED: AW
