STUTTGART: German sports car maker Porsche has revealed its intention to increase its stake in Volkswagen, from 27.3% to 31%. The move binds the two companies even closer and will, they hope, discourage attempts by private overseas investors to acquire Europe's largest automaker.
The purchase of the extra shares triggered a mandatory bid for the whole of VW by Porsche. But the latter says it is not interested in following that route and, to make its intentions clear, offered the legal minimum for the shares.
The bid is expected to be rejected, leaving the maker of the iconic 911 marque free to continue stake building in VW without the need to make a further bid.
VW chairman Ferdinand Piëch also sits on the board of Porsche, whose voting stock is wholly controlled by his family. He ousted the previous ceo of VW, Bernd Pischetsrieder, late last year as part of a grand plan for the business to eventually rival Toyota Motor in terms of efficiency and profitability.
To this end Piëch has backed a strategy to improve VW quality and make its vehicles more technically sophisticated. He has moved away from cost-cutting tactics and Pischetsrieder's desire to steer VW back to its roots as an affordable "people's car".
Comments Pischetsrieder's successor, Martin Winterkorn: "Given the long-term nature of the automotive business, a stable shareholder structure is very important. The increased shareholding will also further anchor our cooperation based on the existing governing agreement."
In a statement Porsche said it "regards the proposed increase of the stake in VW group as a logical step to enable it to meet global challenges in the highly competitive automobile market even better".
"Cooperations are alliances [that] are not uncommon today, but in the not too distant future they will be a part of everyday life."
Data sourced from Wall Street Journal Online; additional content by WARC staff