Blog: Hands off!
Dave Leggett | 26 September 2005
It is interesting, but ultimately unsurprising, to see Porsche taking a large stake in Volkswagen in a pre-emptive move to ensure that Volkswagen doesn't get taken over by a rival maker when the EU eventually succeeds in getting the State of Lower Saxony's 'golden share' law scrapped. The two companies are closely entwined, recently agreeing to work together on hybrid technology. It's a family thing, even. The thought of a rival maker - or someone out of Asia - taking over VW would not go down at all well at Porsche (and a certain Ferdinand Piech - Ferdinand Porsche's grandson - sits on the Porsche supervisory board, still heads VW's supervisory board).
And the transfer of funds from Porsche (not short of a few bob) to VW could be very helpful to VW as it sets about restructuring. So, VW is happy, Lower Saxony seems to have endorsed the deal (blocks a nasty foreigner getting control and really taking the axe to the VW cost base) and the sizeable VW-Porsche mutual appreciation societies in both camps will be suitably content. The only glum faces may be among some investors in Porsche who have seen the share price decline and can probably kiss goodbye to chances of a dividend increase. The bigger picture, I suspect, is not for some of them.
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