Porsche to acquire 20% of VW

[sygyzy]

JUNKETS AND HOOKERS? For Volkswagen, the benefits are clear -- protection against a hostile takeover. It may also get a lift from Porsche's image and well-regarded management. VW needs the help. With profits of $484 million on sales of $55.4 billion in the first half of calendar 2005, VW's profit margin is less than 1%. In addition, VW's image has been tarnished by accusations, currently under investigation by German prosecutors, that some high-ranking managers and a labor representative took junkets at company expense featuring high-price prostitutes (see BW, 7/25/05, "Volkswagen Brakes For Epic Change").

For Porsche, though, the risks seem more obvious than the potential gains. Yes, the deal guarantees that Porsche can continue to draw on Volkswagen's resources as they jointly develop new technology, such as gasoline-electric hybrid technology.

Read more at BusinessWeek

Another article

 

[Mr.IncrediblyBored]

Maybe a dumb question, but the BusinessWeek articles doesn't make this clear - is this 20% of the Volkswagen car division or 20% of the entire automotive group?

 

[sygyzy]

That's not a dumb question at all. I believe it's just the VW car division.

 

[cjgallen]

If Porsche is buying shares of VW (as the article states), then they'd be buying shares of Volkswagen Auto Group (ie VW/Audi/Bentley/Skoda/Seat/Bugatti/Lambo), right?

 

[GTaudiophile]

I think it's German-government-engineered takeover protection. Neither Mercedes nor BMW have the family ties to pull off something similar.

 

[AMDZen]

I want to hear more about this prostitute investigation