Volkswagen and Porsche have succeeded in creating an integrated automotive group that is said to strengthen both companies' positions. The arrangement will take effect from 1st August this year.
The Comprehensive Agreement signed by Porsche SE and Volkswagen AG did not allow for full integration before the second half of 2014. As a result both parties explored ways of accelerating the process.
By means of an intermediate holding company Volkswagen took control of the 50.1% of Porsche shares not already owned directly by it. In return for the shares Porsche was paid £3.5 billion plus a further £1.9 billion to pay down Porsche's debts. The deal also takes advantage of some German tax laws that count the exchange as restructuring - saving a considerable tax bill according to some sources.
Bringing the merger forward will allow a faster introduction of a joint strategy for Porsche's automotive business. As well as simplifying day-to-day cooperation it will allow joint projects to be realised. There is no word on what these projects might be but it could mean that an affordable Volkswagen/Porsche mid-engined roadster finally reaches production.
Volkswagen's CFO said: "The course we are following makes strategic sense and will bring sustained benefits for all stakeholders, it creates transparency as to future developments, and lays the foundations for swiftly intensifying cooperation between Volkswagen and Porsche AG. For Volkswagen, our sound financial and liquidity position and maintaining our strong rating are also important."