Porsche now controls 74% of Volkswagen
Porsche has now surged passed absolute majority and is headed for complete domination of Volkswagen. Porsche announced yesterday that it owns 42.6 percent of Volkswagen’s stock and has the option to buy 31.5 percent more. This now means Porsche is within less than one percent (0.9) of gaining complete domination of Porsche. At 75 percent ownership, Porsche can begin to list Volkswagen’s assets as its own. "The target is to raise this to 75% in 2009, so long as the economic conditions permit, and pave the way for a domination agreement," Porsche said.
Because the German state of Lower Saxony owns 20 percent of VW, that leaves only 5.9 percent of the company left on the open market. Lower Saxony and the labor unions are opposed to this deal, so the last few remaining shares in VW may become a hot and disputed item.
The other hitch to this deal is Volkswagen Law, a special set of circumstances for VW that gives any 20 percent owner (like Lower Saxony) a blocking minority. In a case of a domination agreement Volkswagen Law usually requires over 80 percent ownership (instead of the standard 75 percent.) Volkswagen Law has been struck down by the European Union’s court system but is still under review with the EU’s legislative body.
Source: Wall Street Journal