BERLIN: Volkswagen is expected to complete the takeover of Porsche by Aug 1 following an agreement between the two companies.
VW will pay 4.46 billion euros (RM17.7bil) and one Volkswagen ordinary share to pick up the 50.1 percent of Porsche AG shares it has yet to own.
The move will lead to an integrated automotive group some two years earlier than scheduled under the Comprehensive Agreement signed in August 2009.
VW said in a statement that the inclusion of Porsche into the fold would create synergies worth 320 million euros (RM1.2bil) to be split equally between VW and the Porsche SE holding company.
“The unique Porsche brand will now become an integral part of the Volkswagen Group. That is good for Volkswagen, good for Porsche and good for Germany as an industrial location," said Prof Dr Martin Winterkorn, Chairman of the Board of Management of VW AG.
"Combining their operating business will make Volkswagen and Porsche even stronger – both financially and strategically – going forward. We can now cooperate even more closely and jointly leverage new growth opportunities in the high-margin premium segment through targeted investments in pioneering products and technologies. This will benefit our customers, our employees and our shareholders."
Among VW's stable of brands are Ducati, Audi, Lamborghini and Skoda.
Under the structure developed jointly by the two companies, Porsche SE will contribute its operations as a holding company, including its 50.1 percent Porsche stake, to Volkswagen AG, which already holds indirectly 49.9 percent of Porsche AG.
Once the transaction has closed, Volkswagen will hold 100 percent of the shares of Porsche AG via an intermediate holding company.
In return, Porsche SE will receive a consideration totalling around 4.5 billion euros plus one ordinary share of Volkswagen.
The cash consideration is based on the equity value of 3.88 billion euros (RM15.4bil) for the remaining shares of Porsche AG set out in the Comprehensive Agreement, plus a number of adjustment items.
Among other things, Porsche SE will be remunerated for dividend payments from its indirect stake in Porsche AG that it would have received as well as for half of the present value of the net synergies realisable as a result of the accelerated integration, which amount to 320 million euros.