Following Porsche’s announcement that it would increase its stake in Volkswagen to over 30%, Wulff reportedly said that if Lower Saxony’s 20.25% no longer gave it the power of veto at VW’s annual general meeting then it would have to consider raising its stake.
Backgrounding recent developments is the expected repeal of the ‘VW law’, which restricts a shareholder’s voting rights to 20%, regardless of the value of their shareholding.
Lower Saxony has maintained a stake for political reasons, because Volkswagen is such a large employer in the state but, if the law is changed, it would not be able to exert as much control as Porsche.
Porsche president Wendelin Wiedeking has previously speculated that Lower Saxony would sell its stake in Volkswagen, saying that politics has no role in a business that needs to be internationally competitive. He suggested that Lower Saxony would have to trust a company with competence in the automotive industry to run the company, hinting that Porsche would not be a bad choice for Lower Saxony.
The purchase of around 5% of Volkswagen’s shares would cost Lower Saxony around EUR1.15bn, according to the German Press Agency, something that Lower Saxony tax payers presumably can ill afford.