Nov 19 2006
Latest breaking financial news from AFP reported that Porsche could eventually launch a full takeover bid for Europe’s biggest car maker Volkswagen (VW). VW saw the departure of its chief executive, Bernd Pischetsrieder, though his contract only ended 2012.
Porsche made its move as European competition authorities prepared to begin examining a German law that in theory bars hostile takeovers for Volkswagen. The law is likely to be changed next year. Porsche insists that no takeover is likely for now.
Porsche said it had increased its stake in Volkswagen to 27.7 percent and that its supervisory board had given the green light to increase its stake to 29.9 percent. Under German law, once it gains a 30-percent holding it must launch a takeover bid.
Porsche made its move as European competition authorities prepared to begin examining a German law that in theory bars hostile takeovers for Volkswagen. The law is likely to be changed next year. Porsche insists that no takeover is likely for now.Rolf Woller, an automotive industry analyst at HypoVereinsbank, said Porsche’s motives were unclear. He further said : “We are not really sure if VW is really a takeover target or whether Porsche is just flexing its muscles”. After Porsche said it was increasing its capital, the VW stock price rose.
Every fifth new car in western Europe, the largest car market in the world, is made by the Volkswagen group. Sales last year rose to 95.3 billion euros (122 billion dollars), with after-tax profits of 1.12 billion euros. It has 345,000 employees worldwide. VW’s former human resources manager Peter Hartz was charged on Wednesday in connection with a lurid corruption scandal, including lavish trips abroad and Brazilian mistresses.
It is interesting to note that VW has earlier indicated it’s interest to acquire 51% of Proton, the national car player of Malaysia which is in dire need of foreign partner in order to survive.
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November 19th, 2006 by financetwitter
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