He thus left the free land to rival Wolfsburg

The German automotive industry is widespread pacification. While the Continental OEM renewed Monday his staff in the hope of a fresh start in its relations with its Schaeffler, Volkswagen and Porsche shareholder have looped yesterday evening the main terms of their merger.

Under the agreement validated by the Councils of the two groups, the takeover of Porsche by Volkswagen will be conducted progressively, full integration to intervene current 2011. The Porsche brand will become the tenth of the new structure, which will retain the name of Volkswagen.

In a first stage, expected by the end of the year, Volkswagen will acquire 42 of the capital of Porsche AG, subsidiary of Porsche in charge of the mark. It was assessed at EUR 12.4 billion. But in view of the debts, Volkswagen will pay only 3.3 billion for its share. The number one European will have to pay a nearby sum to buy the company Austrian Porsche Holding Salzburg, one of the leading European distributors of cars. It was controlled by the family shareholders of Porsche. The agreement sets its value to 3.6 billion.

Capital increase

To finance these investments, Volkswagen intends to engage a significant increase of capital in the first half of 2010. Its amount is not yet set. Finally, in 2011, is programmed the merger between the two partners. Volkswagen would then take control of the Porsche SE holding in a capital increase. Here again, the specific financial terms are not stopped, and the hypothesis of failure is even being considered.

In any State of issue, the Land of Lower Saxony, which has always kept a careful eye on its champion of Wolfsburg and has played an important role in the war that is are delivered two companies over the past months, assured the maintenance of its prerogatives. The minority of blocking for future strategic decisions remains attached to 20, which allows the regional Government of Hannover, holder of a little more than 20 of the capital, to keep its right of veto. The Land will still send two representatives to the Supervisory Board.

The group will be led by Volkswagen boss Martin Winterkorn. The number one of Porsche, Wendelin Wiedeking, which restated the stuttgartois constructor and made it the most profitable constructor in the world, had to give up his chair in July, after having accumulated 10 billion euros of debt to go to the onslaught of VW, and ultimately fail. He thus left the free land to rival Wolfsburg.

Develop synergies

The Director of the Institute of the motor vehicle sector of Geislingen judge favourably the approximation: "Of all the major manufacturers, Volkswagen has with Porsche large brands and models offer", see Willi Diez. But "many brands does not necessarily mean much success", nuance there. All the difficulty will be to develop synergies, cooperation on research and development without compromising the identity of the marks. Porsche brings true expertise in the high, which could prove useful in the US market, where Audi and VW are somewhat in the sentence. Willi Diez, this building at the top of range could push BMW and Daimler to develop their partnerships so far remained modest.