VW to Purchase the Rest of Porsche for $5.9B

The company will pay one VW share in an effort to avoid taxes

   

Volkswagen (PINK:VLKAY) announced yesterday that it has concluded an agreement to acquire the outstanding ownership of Porsche (PINK:POAHF). The $5.9 billion deal caps a long-running struggle between Germany’s Porsche and Piech automotive dynasties, Reuters noted.

In 2009, the companies agreed to merge after Porsche attempted to purchase VW. However, VW walked away from that merger last year, attributing its decision to ongoing shareholder litigation.

vw VW to Purchase the Rest of Porsche for $5.9B
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In addition to cash, VW will offer a single common share to Porsche’s holding company, which could allow the deal to qualify as a restructuring under German law, avoiding a 1.5 billion euro tax bill.

Analysts told Reuters that the acquisition provided VW with a premium automotive brand at a good price. The purchase could increase VW’s profits by as much as 6% in the coming fiscal year, boosting its revenues by 9 billion euros.

Porsche models will be produced at VW manufacturing plants.


Article printed from InvestorPlace Media, http://investorplace.com/2012/07/vw-to-purchase-remainder-of-porsche-for-5-9b/.

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