Porsche free to buy Volkswagen
Porsche has been given clearance by EU anti-trust regulators to start buying a majority stake in Volkswagen. Since last year, Porsche has been trying to purchase Europe’s largest automaker because it had to. In October of 2007, the European Union repealed what is know as “Volkswagen Law”, which was put in place to shield carmakers from foreign takeovers. Volkswagen is critical supplier to Porsche, and Porsche did not want to be held hostage by pricing from a new owner.
So in a “we buy them or they buy us” pickle, Porsche launched a bid to buy Volkswagen. The largest challenger to this deal was the German state of Lower Saxony, who owns a 20 percent stake in VW – remnants from the trust formed with the German government after World War II.
Also what spurred this takeover may have been a little family reunion. Volkswagen’s Chairman, Ferdinand Piech is also the grandson of Ferdinand Porsche, the father of the original VW Beetle and Porsche cars. It has been an open secret that Piech would like to bring the family back together.