The European Union’s highest court has ruled that a a law protecting German auto giant Volkswagen from an unwanted takeover is illegal. The so-called “Volkswagen Law” which was devised by the German government nearly half a century ago is the only obstacle preventing sports car manufacturer Porsche from taking over VW.
Volkswagen share prices rose briefly following the ruling. Porsche, which has been buying shares in Volkswagen for two years and has a 31 percent stake in the company, has made no secret of its ultimate goal. The ruling will help the European Commission in its crackdown on so-called golden shares.
It also sets a precedent in Europe’s development of an open market, with a small but highly profitable maker of sports cars swallowing a company 14 times its size.