(Sources: Motor Authority, WSJ, Reuters Blogs)
In late July Porsche announced Wendelin Wiedeking would be leaving his position as the company’s CEOto be replaced by Michael Macht, clearing the way for the supervisory board atVolkswagen to lay the foundation for an integrated company with underVolkswagen leadership. Today that merger has moved forward, and reports indicate the Auto Union name could be revived to brand it.
A Reuters report says that details of a deal between Volkswagen and Porsche have been broadly agreed, with VW set to buy a stake of up to 49 percent in the sportscar maker. The supervisory boards of the German auto makers are expected to vote Thursday morning on a so-called memorandum of understanding, which would be a precursor to a more detailed and firm merger agreement, one of the people said.
The crucial point here is that the family-owned holding company Porsche Automobil Holding SE will get a much-needed cash injection from the sale – anywhere between 4 and 5.5 billion euros – as well as an additional 5 billion euros from selling a package of options on VW shares to the Gulf state of Qatar.
The Porsche clan has already agreed to sell shares to raise at least 5 billion euros, so it should finally be in a position to pay off debts of more than 10 billion euros it stacked up building up a stake of just over 50 percent in VW. Stuttgart-based Porsche ousted its chief executive, Wendelin Wiedeking, in July and is working to pay down a debt pile of more than 10 billion euros ($14.13 billion).
After the successful completion of the VW deal, the Porsche marque will then enter into a new “Auto Union” as the 10th brand, under the leadership of VW CEO Martin Winterkorn.
The Auto Union name was originally given to a merger of four German carmakers – Horch, DKW and Wanderer – in 1932. The brand went on to fame in motorsports through the 1930s, but was disrupted by World War II, and subsequently went through a number of reformations, eventually ending in a renaming to AG in 1985.
The integrated automotive group will be formed from the progressive participation of in AG and the subsequent merger of Automobil Holding SE and VolkswagenAG. Porsche will remain an independent company headquartered in Stuttgart.” Today’s report re-affirms independence, and the Auto Union name is apparently being considered to help preserve the idea that it’s not running the whole show.
