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May 22, 2008

BELGIUM: Porsche seeks EU approval for VW takeover

Porsche has registered its intention to acquire Volkswagen with the European Union anti-trust authorities and they have said that they will announce their decision on 19 June.

Porsche has registered its intention to acquire Volkswagen with the European Union anti-trust authorities and they have said that they will announce their decision on 19 June.

As soon as it has received the relevant approvals from the European Commission and other anti-trust authorities, Porsche will raise its stake in Volkswagen from almost 31% to more than 50%.

Companies are obliged to seek approval from the European Commission when the takeover is of a certain size. According to dpa, Porsche expects all relevant approvals to be in place to that it can take control of Volkswagen in August or September. Around 20 authorities need to give their approval.

Disputes with the second largest shareholder, the state of Lower Saxony, and with workers representatives, are not expected to be resolved within this time period. Dpa says a protracted legal battle over Lower Saxony’s right of veto can be expected. Volkswagen’s works council leader, Bernd Osterloh, is still fighting for better representation rights on the board of the Porsche SE holding company, which will house both the Porsche and Volkswagen manufacturing companies. At the moment the 12,000 Porsche workers have the same representation on the Porsche SE supervisory board as the 360,000 Volkswagen workers, and Osterloh is fighting for this imbalance to be addressed.

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