The family soap opera surrounding the attempted takeover over of Volkswagen by Porsche may soon conclude if a reported deal is approved next week. Porsche SE, the holding company that owns automaker Porsche AG, has attempted to secure its independence by acquiring a controlling interest in Volkswagen. Unfortunately for Porsche, the economic downturn has put the company in danger of insolvency thanks to a hefty debt load.

In the midst of all the financial maneuverings, a personal drama has steadily unfolded as well. Porsche is controlled by the descendants of Ferdinand Porsche's children, Ferry Porsche and Louise Piëch. The leaders of the Porsche and Piëch branches of the family, Wolfgang Porsche and Ferdinand Piëch, have been at odds throughout this entire process. Piëch is chairman of VW's supervisory board, while cousin Wolfgang holds a similar position at the family business. As the sequence of events progressed, it appeared that Wolfgang Porsche was trying to oust his cousin, while Ferdinand Piëch was trying to eliminate Porsche CEO Wendelin Weideking.

It now appears that the two companies have reached an agreement that will allow Porsche SE pay off much of its €10 billion+ debt. If approved, Volkswagen would pay €8 billion for Porsche in two stages. The first would give VW 49.9%, with the rest coming at a later date.



Source - Autoblog

 

More info to this thread.


FRANKFURT (Reuters) - Porsche SE's (PSHG_p.DE) controlling families will agree on Thursday to accept an offer by Volkswagen (VOWG.DE) to buy its sports car business Porsche AG for roughly 8 billion euros ($11.28 billion), Der Spiegel reported on Saturday.


Germany's leading weekly magazine wrote that the rival Porsche and Piech clans, which own 100 percent of Porsche SE votes, will approve the two-stage takeover at a supervisory board meeting on July 23.
Volkswagen would purchase a 49.9 percent stake in Porsche AG and at a later date acquire the rest, in a deal that would create an integrated automotive group with 10 brands under the leadership of the Wolfsburg-based carmaker.


The sale would help Porsche SE pay off most of its debt, which two sources told Reuters has ballooned to considerably more than 10 billion euros.


Der Spiegel also said embattled Porsche SE and Porsche AG Chief Executive Wendelin Wiedeking is negotiating over a severance package that could total more than 100 million euros. In the meantime, production chief Michael Macht will replace him as head of Porsche AG, the magazine reported.


On Thursday, Wiedeking rejected speculation he was about to leave the group.


Asked on Saturday whether the two families have reached a decision for the July 23 board meeting, Porsche spokesman Anton Hunger said "we have not been informed of one," adding that the Spiegel report was speculation that the company would not comment on.
Separately rival German weekly magazine Focus reported that Volkswagen's powerful chairman and part-owner of Porsche, Ferdinand Piech, plans to remove Wiedeking on Thursday from the influential six-man steering committee on the VW supervisory board.
The vacancy could open up the opportunity for Piech's cousin and rival, Wolfgang Porsche, VW supervisory board member and Porsche SE chairman, to replace Wiedeking in the committee as a representative of his side of the family.


The grandfather of Wolfgang Porsche and Ferdinand Piech was Ferdinand Porsche, designer of the Beetle and founder of Volkswagen.

 

Source: WSJ

By DANA CIMILLUCA and MARCUS WALKER

Volkswagen AG's plan to acquire Porsche Automobil Holding SE's auto business has run into fresh complications over a potential multibillion-dollar tax liability as well as growing tensions between the two camps, according to people familiar with the matter.

The two sides tried unsuccessfully over the weekend to find a way around a tax payment that could be triggered by the sale of Porsche's sports-car operation to Volkswagen, the centerpiece of a complicated three-way deal also involving Qatar, a person familiar with the matter said. If unsolved, the issue could scupper the deal as currently conceived, this person said, forcing Porsche to find another solution to its liquidity problems.

VW disputed the significance of the tax issue, however, with a spokesman calling talk of it that swirled Monday "a transparent maneuver to torpedo a sensible business idea."

Porsche's transaction with Qatar, which would hand the emirate a substantial stake in the company, has also been cast into doubt, the people said. It's unclear whether management has enough votes on Porsche's supervisory board to win approval for the two-step deal ahead of a Thursday vote in Stuttgart.

Some members of the family that owns the luxury sports car maker have resisted selling a stake in its holding company to Qatar, preferring instead to simply sell it options on Volkswagen stock that Porsche holds. But Qatar is insisting on a Porsche stake as part of any deal, the person said.

The discord, as well as the number of significant issues that remain to be negotiated, mean it could take months before a final deal is in place, if at all, people familiar with the matter said. VW's portion of the deal won't even be voted on Thursday, they said.

Write to Dana Cimilluca at dana.cimilluca@wsj.com and Marcus Walker at marcus.walker@wsj.com