Porsche has increased its stake in Volkswagen to over 40%. The company says it hopes to have a majority holding in VW by the end of the year. The sports car manufacturer announced it had increased its stake in VW yesterday (October 26) in an attempt to ease the economic uncertainty in the car market.
It says: “Porsche has decided to make this announcement after it became clear that there are by far more short positions in the market than expected. The disclosure should give so called short sellers – meaning financial institutions which have betted or are still betting on a falling share price in Volkswagen – the opportunity to settle their relevant positions without rush and without facing major risks.”
Porsche was already the largest shareholder in VW, holding about 35%. It now says it wants to own 75% of of the marque by 2009, reaching the 50% mark by Christmas.
It adds: “Assuming the economic framework conditions are suitable, the aim is to increase to 75% in 2009, paving the way to a domination agreement. The intention to increase the Volkswagen stake to above 50% in November/December 2008 remains unchanged.”
Porsche maintains it does not want to merge with VW but is keen to create an alliance that can take on the competition.
The company expects the “VW Law” – which gives the German government the right to veto strategic decisions made at Volkswagen – to be scrapped by the European Commission later this year.