Like the twists and turns of many a soap opera, Volkswagen and Porsche’s tenuous relationship could get even more serious now that a report suggests that the automotive giant could buy out the rest of its little sports car manufacturing brother by the end of 2012.
VW is said to be looking to acquire the remaining 50.1 percent of Porsche it doesn’t currently own, according to a report yesterday from Dow Jones Newswire. Disclosures released by VW indicate that Porsche has put in an option to sell its 50.1 percent exercisable in mid-November. Complex German tax codes dictate that VW can exercise its own call option on VW between March and April. An outright purchase before then would be subjected to a high taxaction.
The two brands have long flirted with some sort of consolidation, beginning first with Porsche’s plan to buy much larger VW a few years ago. But when that deal failed, VW was obligated under Germany’s laws to buy a share in Porsche. Now, the two brands share upper management, but they operate as two separate companies with little in the way of the kind of streamlining one might expect of two companies so financially linked together.
The lack of collusion has frustrated upper management at both firms.
“We want to cooperate with Porsche in such a way that as many synergies can be leveraged as soon as possible without needing to have a lawyer stand next to a Porsche employee every time he screws something into a Volkswagen or vice-versa,” VW and Porsche CEO Martin Winterkorn said earlier this month at the Detroit show.
Winterkorn stated that a joint EV platform being developed by Porsche and VW is being done “at arm’s length” because the two companies are intertwined but still separate.
