Germany’s Volkswagen and Porsche have completed their long-awaited tie-up.
That came one day after Porsche posted a six-month profit of 1.15 billion euros, compared to a 149 million euro profit a year earlier.
Once integration is completed, the two expect to gain over 700 million euros in savings in development, purchasing and production and erase Porsche’s 2.5 billion euros of debt.
Volkswagen’s purchase of the second half of Porsche adds the super luxury – and super profitable – sports cars such as the iconic 911 model to its line-up.
VW is already Europe’s biggest carmaker. It is aiming to be the world number one by 2018.
Both companies already cooperate in many areas. VW, which also includes luxury division Audi, makes the bodies for the Cayenne SUV and Panamera coupe, Porsche’s two best-selling vehicles. They will jointly develop Porsche’s next model, the Macan compact SUV, due to hit showrooms in 2014.
Long road to merger
The two manufacturers had first agreed a full merger in August 2009, after Porsche racked up more than 10 billion euros of debt in a failed attempt to take over VW, sparking feuds among the Porsche and Piech family dynasties.
VW bought 49.9 percent of Porsche’s sports car operations in December 2009 for 3.9 billion euros and had sought to acquire the remainder through a share-swap with the holding company.
The car makers dropped the merger plan last year because of US and German investor lawsuits accusing Porsche of covertly amassing VW shares, causing short-sellers to lose billions.
But on July 4, VW and Porsche agreed a deal allowing the Wolfsburg-based manufacturer to buy the remaining half of Porsche for 4.46 billion euros and avoid a tax bill of up to 1.5 billion euros by transferring a single VW share to Porsche.
Wires > Business
- 07:09 CET Nestle, on health kick, moves into milk allergy testing
- 06:00 CET Jazz Pharma nears deal to buy Celator for about $1.5 billion – WSJ
- 05:37 CET Shell reports restarting unit at Scotford, Alberta facility
- 05:22 CET Asia shares firm but set for monthly loss
- 04:00 CET French finance minister rules out Google tax deal, more firms…
- 03:33 CET Japan Ishihara: still trying to balance economic growth, fiscal…
- 03:24 CET Verizon, unions agree to pay raises, new jobs to end strike
- 03:00 CET U.S. oil prices rise on start of summer driving season