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The last thing Porsche wants is to buy VW


Sao Paulo
16 Aug 2006
Saw this article thought it might be of interest:

AFTER THE board of Porsche, this week, authorised the possible increase in the sports car-maker's stockholding in Volkswagen to 29.9%, all the talk has been about whether Porsche is winding-up for a take-over bid. In Germany, 30% is the mandatory take-over threshold.

Porsche also approved the issue of 8.75m new shares. That is half its existing stock which the board said would be useful over the next 5-years. The board did not say , specifically, what the extra capital would be used for.

What else would it be used for other than going towards acquiring outright control at Volkswagen? Around £5.5 billion is a nice tidy war chest .

I would guess that owning Volkswagen is not Porsche's number one goal.

In the past 10-years, Porsche has built itself into Europe's most profitable car company. VW, on the other hand is beset with problems; over-capacity, over-paid workers, over-demanding unions. Bribery and sex scandals, which are now coming to court, are the least of VW's problems. Why would Porsche want to step into that quagmire.

Believe me, it doesn't. The two don't fit and could not fit. Porsche has successfully driven away from the intense competition and low margins of mass car manufacturing. VW, however, is in it up to its axles. Even the name means people's car whereas Porsche enjoys a niche market - give or take the Cayenne. Given the prices which 'the few' are willing to pay means the car-maker makes profit, and lots of it, on each vehicle it sells.

Porsche will only step-in to buy Volkswagen if it has to; if someone else looks like doing so. And the reason is because Porsche relies on VW for certain parts as well as for the manufacture of the Cayenne. It would not wish to be reliant on another car maker. At the moment, Ferdinand Piech, Volkswagen's supervisory board chairman, is also a member of the Porsche family, and a major shareholder in the sports car-maker. That is a nice tidy relationship if you are sharing components and manufacturing (Cayenne and Touareg) as well as other parts.

There is one other element which makes VW unattractive to any bidder. It is called the 'VW Law' which limits any one shareholder to 20% of voting rights, irrespective of the size of the shareholding. An EU ruling on the law - said by some to be anti-competitive - is still pending

Piech, however, will have to retire soon; maybe within 5-years. So the war-chest is being built in readiness to fight-off any other possible VW bidders . . . unless . . . uhm . . . No, it surely couldn't be intended for Aston Martin or Jaguar!

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