10 July 2012

VW Vs Porsche

In an affair that is so bizarre in the extreme, it could only happen in Germany. About the year 2005, Porsche was buying VW shares, not to take VW over but to stop others from doing so apparently. In 2008, with Porshe holding nearly half of VW shares, it was revealed that Porsche was in fact wishing to take over VW. The economic meltdown in 2008 had to halt the acquisition, and Porsche was now under financial strain itself over the affair. There was then going to be a merger of the two companies, but that was called off due to legal obstacles. In 2009, VW started to buy out Porsche and by August 1st, 2012, VW will have completely taken over Porsche and it will become part of the VW Group.

Tiny Porsche taking over much larger VW was always an ambitious objective. The fact it got so far was amazing in itself. VW's absorbing Porsche makes much more sense, as they already co-operate in certain areas. There will be cost efficiencies garnered by this take over, but Porsche will now have to work within a large company. Approval will have to obtained before any decisions can be implemented. How that pans out will be interesting.

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