Volkswagen, the biggest European automaker, said on Oct. 20 it would buy 49.9% of the luxury sports car maker Porsche by the end of this year for around 3.9 billion euros (US$5.8 billion.)
Until now, a VW statement said, VW had sought to acquire 42% of Porsche in the first step of a full merger of the two companies. The increase stake purchase "reflects the positive development of ... discussions between Volkswagen and Porsche," it added.
The two companies have made good progress on "synergies in several areas," a VW spokesman said.
VW planned to finance the operation with a capital increase of around 10 billion euros by 2014, with the first tranche launched in the first half of 2010. "At least four billion euros" would be used to buy Porsche, which will become VW's 10th brand, the spokesman said. The overall calendar has not changed and the final merger of the two groups is still expected to occur in 2011.
VW wants to raise cash to finance the Porsche purchase, underpin its rating by international agencies and retain "financial flexibility," the spokesman added.
The total amount being targeted has raised speculation over a possible VW move on the conglomerate MAN, which makes heavy trucks and in which VW is already the dominant shareholder with a stake of around 30%.
VW supervisory board president Ferdinand Piech said last month he would like to see 12 brands within the VW group, and the company is also believed to be interested in a tie-up with the Japanese car maker Suzuki.
Copyright Agence France-Presse, 2009