Porsche will protect VW

Gets green light to buy controlling stake

By PH Staff / Wednesday, 12 July 2006 / Loading comments

Cayenne: half Porsche, half VW

Porsche has been given the green light by Germany's anti-trust authorities to buy a controlling interest in Volkswagen. The authorities gave the OK for the iconic sports car maker to purchase an additional 3.5 per cent of stock to bring its holding to over 25 per cent.

What this means is that the struggling VW is immune to a hostile foreign take-over, as 75 per cent of the vote would be required. Porsche has been buying VW stock at a cost of €3.8 billion since last September.

Porsche is not keen to see the company fall into the wrong hands from its point of view, and this last move of the financial chess pieces now secures its position. The ties between Porsche and VW began in the 1930s -- Ferdinand Porsche as of course the designer of the Beetle. The links survived the war, since when Porsche has relied heavily on VW for parts, manufacturing facilities and joint projects such as the Cayenne/Touareg.