Porsche to take over VW?

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Wed 14 Feb 2007 12:41
Porsche to take over VW? - artful dodger {P}
Is Porsche going to take over VW?

According to an article (quoted in full below) in today's Telegraph Business section it looks very likely.

Volkswagen was the centre of bid speculation yesterday after an adviser to the European Union's top court ruled that a German law which shields Europe's largest carmaker from a takeover should be scrapped.

The advocate general, an adviser to the European Court of Justice, said the law hindered the free flow of capital within the EU by capping voting rights and limiting board seats. The Court tends to uphold the views of the advocate general.

VW shares rose as analysts speculated that scrapping the protection would pave the way for a takeover by Porsche. The luxury carmaker has 27.4pc of VW and close production links.

In a further sign that Porsche will extend its control of the company, the state of Lower Saxony, which has 20pc of VW, said it would no longer oppose the sports carmaker's chairman, Ferdinand Piech, holding the chairmanship of the larger company.

The 1960 VW law, passed to ensure the independence of the carmaker, prevents any shareholder from exercising more than 20pc of the voting rights, no matter how large the stake. The European Commission, which has tried for years to remove the protection, welcomed the advocate general's opinion.

The family that owns Porsche includes Mr Piech, who is now set to remain as chairman even after his term expires later this year. A Porsche spokesman said: "We welcome the opinion of the advocate general. This confirms our stance on the VW Law and we assume that the court will follow the position of the advocate general."

Will it be in VW's best interest or should someone else take them over?

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Roger
I read frequently, but only post when I have something useful to say.
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Wed 14 Feb 2007 14:19
Porsche to take over VW? - Lud
It may be in VW's best interests but Porsche could find itself biting off more than it can chew.
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Wed 14 Feb 2007 16:52
Porsche to take over VW? - AlanGowdy
Might be true - and a sort of 'coming-full-circle' situation as Porsche (the man not the company)designed the first VW. I understood that the German government encouraged Porsche to take a sizeable stake in order to block any likely foreign takeover of VW. Unlike successive British governments, the Germans consider it to be important that a country retains ownership of its key businesses.
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Wed 14 Feb 2007 17:01
Porsche to take over VW? - Sofa Spud
Only a year or two ago, a Porsche spokeman was quoted in the motoring press as saying Porsche would never make diesel cars. If they take over VW it looks like they'll have to!

Incidentally, in the late 1920's, Foden, which then made steam lorries, said they's never make diesel lorries. That led to Edwin Richard Foden starting a breakaway company, ERF, which was a runaway success and soon the original Foden company was making diesel powered truck too.

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