Piech, Porsche families indicate merger interest
SALZBURG, Austria — Porsche SE announced Wednesday it was moving toward creating an “integrated” carmaker with fellow German automaker Volkswagen AG, but emphasized that the high-end sports car company would retain its independence.
The statement came following private meetings in Salzburg of the Piech and Porsche families — the controlling shareholders of Porsche Automobil Holding SE.
Porsche issued a statement in Stuttgart saying that they are now arguing “for the creation of an integrated car manufacturing group.”
Porsche is currently Volkswagen’s largest shareholder with 51 percent and has said it wants to raise that stake to 75 percent — but that goal probably wouldn’t be possible this year given the state of the global economy.
Porsche said the decision came out of “intensive talks about the deepening of the cooperation” which included discussing “the inclusion of capital measures.”
“In the final structure, 10 brands shall stand below an integrative leading company alongside each other, whereby the independence of all brands and explicitly also of Porsche shall be ensured,” the company said.
Porsche said talks would now continue “on this basis” with other stakeholders, including the German state of Lower Saxony.
“It is the aim to develop a corresponding basis for decision-making on the future structure of the common group within the next four weeks,” the company said.
Neither Porsche nor Volkswagen returned repeated calls seeking further details.
Media in Germany have recently reported that Porsche is experiencing financial difficulties stemming from efforts to increase its stake in Volkswagen and falling car sales from the world economic crisis.
At Volkswagen’s annual general meeting April 23, chief executive Martin Winterkorn said “I’m certain that we can and will advance our partnership in the difficult current year 2009,” but wasn’t more specific.
Winterkorn said the two companies together “have the stuff to develop the powerhouse of the international automobile industry.”
German media speculated the key topic was how to combine the two companies as Porsche looks to reduce €9 billion in debt it took on to gain control of Wolfsburg-based Volkswagen AG, Europe’s biggest automaker by sales.
Porsche recently secured financing for €10 billion ($13.3 billion) from a number of banks, and is reportedly seeking a further €2.5 billion in financing.
Porsche Chief Executive Wendelin Wiedeking and Volkswagen supervisory board chief Ferdinand Piech were expected to discuss the options for the two companies, media reports said.
Piech, who owns about 10 percent of Porsche, is the grandson of Ferdinand Porsche, the founder of Porsche.
A supervisory board is the German equivalent of a U.S. board of directors.
The talks come even after Qatar acknowledged it was in discussions about the possibility of buying a stake in Porsche, too.
Sheik Hamad bin Jassem Al Thani was quoted last month by the country’s Al-Arab newspaper as saying that discussions and meetings are ongoing with the luxury sports car maker, but no decision had been reached.
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