Porsche, Volkswagen Iron Out Merger Details
The supervisory boards of Volkswagen and Porsche have “broadly agreed” on the details for a deal to merge the two automakers.
A member of Volkswagen’s board told Reuters on Wednesday that “questions over valuation have been resolved.” Volkswagen will buy a stake of up to 49 percent in Porsche, with a goal of eventually creating an “integrated” automotive group by the end 2011. A partial sale of Porsche’s sports car operations will reportedly be decided at a board meeting today.
Porsche would keep its identity as an independent brand under Volkswagen (it would beVW’s tenth brand), though Volkswagen CEO Martin Winterkorn will also become the CEO of Porsche. Porsche recently showed its former CEO (and, coincidentally, the highest paid executive in Germany,) Wendelin Wiedeking the door in order to ensure a smoother merger process with VW. Wiedeking led a failed hostile takeover attempt of Volkswagen, and later opposed the merger of the two carmakers.
The new company would generate about 120 billion euros ($171 billion) in revenue and sell about 6.4 million vehicles, Reuters said, using figures from the automakers’ past fiscal year figures. The new company could possibly be called “Auto Union.”