Volkswagen to buy 49.9% of Porsche in first stage of merger

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Filed under: Porsche, Volkswagen, Earnings/Financials
The days of Porsche being an independent automaker will soon be drawing to a close. Volkswagen has announced that it is ready to move ahead with the first stage of its buyout of the smaller company that had tried to do the same thing to it just a short while ago. Back in August when the VW board approved the merger, the Wolfsburg company announced that it would start off by purchasing 42 percent of Porsche AG, the car building unit of Porsche. That stake has now been increased to 49.9 percent and the purchase will happen before the end of 2009.

According the announcement from Volkswagen, work on future joint projects between the two companies is moving ahead faster than anticipated. As a result, VW is buying a larger stake now with the expectation that Porsche's share price will increase next year due to these new projects.

Next year VW will be issuing more preferred shares in itself to help pay for the rest of the acquisition while maintaining its credit rating. The full merger is expected to be completed sometime in 2011.

[Source: Volkswagen]Continue reading Volkswagen to buy 49.9% of Porsche in first stage of merger
Volkswagen to buy 49.9% of Porsche in first stage of merger originally appeared on Autoblog on Thu, 22 Oct 2009 08:20:00 EST. Please see our terms for use of feeds.


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