Porsche revs up long-mooted bid for VW
FRANKFURT (AFP) — German luxury sports car maker Porsche indicated Monday it was preparing to take a majority stake in its much larger German rival Volkswagen, the biggest car maker in Europe.
Porsche's supervisory board approved a plan to increase its VW stake to more than 50 percent, from around 31 percent at present, it said.
Porsche chief executive Wendelin Wiedeking said the group's aim was "to create one of the strongest and most innovative automobile alliances in the world."
The company, whose interest in a takeover offer was known, said however that it was not planning a merger of the two manufacturers.
There remains doubt about how much control Porsche would have over Volkswagen given an existing German law, known as the "VW law," which gives workers' and Volkswagen's home state of Lower Saxony a veto over strategic decisions.
The law was rejected by a European court in October, but German government spokesman Thomas Steg referred Monday to "a desire within the government to replace the old Volkswagen law with a new Volkswagen law."
Wiedeking had complained in late January to German justice officials about a proposed VW law that would retain the veto over strategic decisions at Volkswagen.
Wiedeking said he did not understand why "common rules do not apply to Volkswagen as they do to all other enterprises."
According to the magazine Der Spiegel, the government is seeking a compromise that would allow Lower Saxony, where VW is based and which is controlled by the Christian Democrat party of Chancellor Angela Merkel, to have a say in where manufacturing takes place.
Porsche, which makes the 911 sports car, has never hidden its intention to eventually increase its VW stake to more than 50 percent.
The highly-profitable Porsche employs 11,400 workers, while Volkswagen has about 330,000.
But the sports car group had patiently acquired options to increase its stake in VW, while repeatedly declining to say when it might make its move, though press reports had said it wanted to wait until after January regional elections in Lower Saxony.
The long-awaited announcement has already raised opposition among VW workers however, because they stand to lose clout when their company is integrated into Porsche Holding SE.
Justice Minister Brigitte Zypries had prepared draft legislation to replace the VW Law that was rejected in October by the European Court of Justice.
The proposed law would protect the right of employee representatives to reject strategic decisions such as factory closures by VW management.
Lower Saxony would also retain an effective veto over VW board policies with its holding of roughly 20 percent in the group.
