Porsche has announced that it has today acquired a further 4.89% of Volkswagen ordinary shares, which means its stake has now risen to 35.14% of the voting rights.
In a statement the company said that this step ensures that Porsche has a lasting majority at the VW annual general meeting. Dr. Wendelin Wiedeking, Chief Executive Officer of Porsche, said: “Our goal continues to be to increase our stake in Volkswagen to more than 50%. Today’s step is a further milestone along this road.”
By going above 35% of the voting rights, Porsche said it will acquire de facto control of the Wolfsburg-based group. As a result, employee representatives of Volkswagen will now take seats in the works council of Porsche SE and the supervisory board of Porsche SE. Porsche SE is the holding company for both Porsche and Volkswagen.
Volkswagen workers were in dispute with Porsche earlier this year over the number of seats they would have on the Porsche SE board and there is an on-going distrust of Porsche management, with workers concerned that they will lose their historically important role in determining the strategic decisions made by the company. Recent concerns have focused on Porsche’s attempts to gain management control of Audi so that the two luxury brands can work more closely together and not compete against one another. Porsche said that Dr. Wiedeking was confident that the cooperation between the employee representatives of Porsche and Volkswagen in both bodies – works council and supervisory board – would help them develop a better understanding of each other’s positions and would lead to a constructive and forward-looking co-existence.
As a result of the new shareholder structure, Porsche is required by law to submit a formal mandatory offer for Audi AG. The relevant offer documents must be filed with the German Federal Agency for Financial Services Supervision (BaFin ) within the next four weeks. At a time when sensitivities over Audi are heightened, the Porsche statement was careful to point out that this formality is a statutory requirement and has no effect whatsoever on the intentions of Porsche. Dr. Wiedeking commented: “We regard Audi as an integral part of the Volkswagen group and have no interest in removing the company from the group structure.“
Porsche will only offer the minimum price prescribed by law for the shares, which is expected to be about 487 Euro per Audi share. Volkswagen has stated that it will not be accepting the offer for its 99.14 per cent of the Audi shares. In practice, therefore, the mandatory offer only relates to a freefloat of 0.86 per cent, representing approximately 370,000 Audi shares. Based on last Monday’s closing price, these are valued at approximately 170 million Euro. Porsche does not intend to acquire Audi shares outside the mandatory offer, it said.