German automobile-maker Volkswagen says it is on track to finalise the full takeover of sports car manufacturer Porsche by the end of the month.
Volkswagen AG said in a statement late on Wednesday that Porsche AG will become another fully integrated brand of the Volkswagen group as of August 1, two years before a planned target date to complete the deal free of tax.
Europe’s largest carmaker and Porsche have been pushing for rapid integration of their automotive businesses to pave the way for cost savings of about $876m a year and to erase about $2.5bn of debt at the sports-car’s holding company.
The deal is also set to restructure the companies’ complicated ownership ties. Volkswagen says the missing 50.1 per cent in Porsche AG’s capital will be bought from holding company Porsche SE for $5.61bn plus one Volkswagen share.
Porsche SE, in turn, currently holds a sizeable stake in Volkswagen and several executives and major shareholders are active in both firms.
“The accelerated integration will allow us to start implementing a joint strategy for Porsche’s automotive business more quickly and to realise key joint projects more rapidly,” Hans Dieter Poetsch, VW’s chief financial officer, said.
VW acquired 49.9 per cent of the Stuttgart-based manufacturer in December 2009 after a botched attempt by Porsche to take control of its much bigger competitor.
“It’s a great deal for VW, both financially and in operative terms,” said David Arnoldm London-based analyst with Credit Suisse.
VW and Porsche will hold a joint news conference to outline details of the planned integrated car maker on Thursday in Wolfsburg.