VW supplies bodywork for the new Porsche Panamera, which is being unveiled this weekend during Monterey Motoring Week. (Photo: Porsche)
Volkswagen agreed to buy a major portion of Porsche, bringing the famed sports-car maker under VW’s corporate umbrella and laying the groundwork for an integrated automotive unit, VW has announced,
The decision by VW's directors will lead to the merger of Porsche with Volkswagen in 2011. The joint unit will be led by VW but with Porsche remaining independent and based in Zuffenhausen, Germany, VW said in a press release.
The move by VW to pay $4.7 for an initial 42 percent of Porsche comes just months after Porsche’s ill-fated attempt to acquire VW, an automotive giant, and less than a month after the ouster of longtime Porsche CEO Wendelin Wiedeking.
Wiedeking led the effort to gain control of VW, in the process driving Porsche into more than $14 billion of debt. In an ironic turnaround, Porsche was forced to seek help from VW to cope with the crushing debt created by the acquisition attempt.
Wiedeking is credited with bringing Porsche from a struggling niche company to a profit-making premium automaker during about 15 years of leadership.
Current Volkswagen CEO Martin Winterkorn will head the combined VW-Porsche unit, VW said.
"Volkswagen and Porsche today took a decisive step towards a joint future,” Winterkorn said in the release. “I am convinced that the outcome of this integration will be the best vehicles for our customers, secure jobs and the creation of long-term value for our shareholders.”
The Porsche acquisition will put 10 European brands under VW’s leadership, including Audi, Bentley, Bugatti and Lamborghini. VW already has a manufacturing relationship with Porsche, supplying many vehicle components.
The merger with Porsche will result in an integrated automotive group, VW said, with unit sales of around 6.4 million vehicles and more than 400,000 employees.
