Merger spat
July 20, 2009
Volkswagen's planned takeover of Porsche may yet fall apart because of a three billion euro ($4.3 billion) tax bill, reported German newspaper Sueddeutsche Zeitung on Monday.
The newspaper, citing unidentified members of Porsche's supervisory board, said that if Volkswagen had to pay the tax bill, the deal would fall apart.
Meanwhile, Lower Saxony's State Premier Christian Wulff (CDU) has called for the carmakers to strike a deal by Thursday. Lower Saxony owns 20 percent of Volkswagen.
"Here is my impassioned appeal to both carmakers: let us strike a deal by Thursday, so that VW and Porsche can finally return to competition and get on with the business of making cars," said Wulff. The politician, is also on the the supervisory board of VW.
Porsche works council head Uwe Hueck has denounced the potential takeover of Porsche by Volkswagen, and says that he will call for a union takeover of the company's premises to effectively paralyze the sports car maker. "You cannot make a Porsche with parts from a (Volkswagen) Polo," Hueck criticized any planned takeover by VW, saying the move would endanger the jobs of 11,000 workers.
Soft landing for Wiedeking
German media were reporting over the weekend that Porsche head Wendelin Wiedeking would step down and be given a "golden parachute" in the amount of one hundred million euros. It would be the largest severance package in German corporate history.
However, Wiedeking has said that he has every intention of finishing his contract which runs through 2012.
Porsche has denied reports that Wiedeking's job is on the line, while other sources have him offering his resignation at the upcoming July 23 meeting of Porsche's supervisory board.
The deal itself
If the proposed merger goes through, Porsche will become the tenth car maker in the Volkswagen stable, making it the largest car manufacturer in the world.
The deal has Volkswagen paying eight billion euros for an initial 49.9 percent stake in Porsche and acquiring the rest at a later stage, according to the German weekly magazine Der Spiegel. Under VW's proposals the Porsche and Piech family owners would hold 50 percent in the new company with the German state of Lower Saxony retaining its 20 percent stake and Qatar taking up to 19.9 percent, according to Der Spiegel.
While rumors circulated over the weekend claiming that the deal was basically done, both companies have yet to release a statement.
A final decision may be reached at board meetings of Porsche and VW which are scheduled to be held separately on Thursday.
av/dfm/dpa/Reuters/AFP
Editor: Neil King