EU Wins VW Takeover Victory

25 October 2007

ZUFFENHAUSEN, Germany: The planet's most profitable carmaker Porsche is rubbing its hands in anticipation of tabling a bid for Europe's biggest auto manufacturer, Volkswagen - in which the former's 30.9% stake makes it the largest single shareholder.

A historic ruling by the European Court of Human Justice has overturned a decades-old German law that protects the once state-owned giant from hostile takeover bids.

It was passed in 1960 to protect jobs and ensure that 'foreigners' could not gain control of VW after the firm was privatised.

The European Commission, which brought the case against the German government, argued the law was a barrier to cross-border investment within the European Union.

Porsche will now look to increase its shareholding to 50% before joining with the state of Lower Saxony - which holds a 22.3% stake - to ensure the firm remains in German hands.

Data sourced from Financial Times online; additional content by WARC staff