Volkswagen AG, Europe’s biggest carmaker, and Porsche SE should sell a stake in the company resulting from a merger to a foreign investor, according to German’s Lower Saxony, the VW shareholder with veto power.
The German state has no intention of increasing its 20 percent stake in VW after the carmaker’s planned combination with Porsche, Prime Minister Christian Wulff said in an interview late yesterday in Volkswagen’s hometown of Wolfsburg, Germany. About 30 percent of the new company will be available to investors once the owners sort out its structure, he said.
“This is a considerable portion that would be open to many possible investors,” Wulff said. “We’re open to those investors. Lower Saxony’s role will remain the way it is now.”
Talks between the automakers to hash out details of a merger were put on hold after Volkswagen Supervisory Board Chairman Ferdinand Piech challenged Stuttgart, Germany-based Porsche’s finances and Bernd Osterloh, VW’s works council chief, asked to quit the negotiations. Porsche workers demonstrated yesterday against a combination with VW and demanded independence. The Porsche and Piech families together control 50 percent of Porsche, which in turn owns 51 percent of Volkswagen.
“Many things would be a lot easier at the moment if the two families were as united as Volkswagen, the state of Lower Saxony and the works council,” Wulff said after a campaign rally of his Christian Democrats attended by Chancellor Angela Merkel, VW Chief Executive Martin Winterkorn and Osterloh. “Unfortunately, the lack of unity is rather indisputable.’
Volkswagen Law
Under Germany’s so-called Volkswagen law, Lower Saxony, which owns 20 percent of Volkswagen as its second-largest stakeholder, may block major decisions by the carmaker.
Piech’s counterpart at Porsche, Wolfgang Porsche, was struggling to raise financing to increase the stake in Volkswagen to 75 percent and had been at loggerheads with Piech about how to unite the carmakers. While Piech wanted to transfer Porsche’s car unit, maker of the 911 sports car, to VW, Porsche CEO Wendelin Wiedeking was pushing a proposal to merge the two automakers, a person familiar with the plans has said.
The families agreed on May 6 to create an ‘‘integrated” car manufacturer that would put Porsche alongside VW brands including Skoda and Audi. Details of a combination would be decided in four weeks, Porsche said at the time.
Negotiations between Volkswagen and Porsche scheduled for yesterday were canceled at the request of VW’s Osterloh. About 6,000 employees at Porsche’s main Zuffenhausen plant and two other factories near Stuttgart joined a rally yesterday addressed by Uwe Hueck, Porsche’s top labor leader.
‘Spreading Hatred’
“There will be no talks for as long as they keep spreading hatred against Volkswagen,” Osterloh said in a separate interview. Asked whether the carmakers will meet a plan to decide on the new company’s structure by early June, Osterloh said: “We’re not sure yet but it could certainly become a bit difficult.”
Regardless of the current impasse, a completion of the combination of Volkswagen and Porsche would have “huge benefits” for jobs and growth, according to Wulff.
“Such a combination would promise unbelievable synergies,” Wulff said. “This could make Volkswagen and Porsche the world’s unrivaled No. 1.”
Wulff wouldn’t say who could likely be an investor in the sports-car maker. Porsche was in talks with Arab investors including Qatar’s Emir Sheikh Hamad bin Khalifa al-Thani, a person familiar with the talks said earlier this month.
source: bloomberg
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