Merger and Acquisitions: Porsche Case Essay

5529 Words Jun 6th, 2011 23 Pages
Porsche Agrees Sale to Qatar; Merger with
VW May Complete Before 2011

17 Aug 09

The merger between Porsche and VW may be completed ahead of schedule, according to VW
Group CFO Hans Dieter Poetsch, but questions are emerging about corporate governance over the process.

IHS Global

Significance Qatar Holding will acquire a 10% voting stake in Porsche and 17% in eventual parent group VW Group as a result of its 7-billion-euro investment in the
German giant.

Implications VW and Porsche are still to enact their own capital increases, VW's will happen in the first half of 2010, whilst Porsche's plans are less concrete, but necessary to pay
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Marco Cabras, a spokesperson for Germany's DSW association for private investors, said: "This isn't a prime example of good corporate governance.
More transparency is desperately needed about decision making procedures and processes."
conflicts of interest, adding that if any arose they "could be resolved." Poetsch said that he and his between the two companies. However, Cabras pointed out that as Porsche already has more than
endorse VW's management board. "This issue needs to be resolved," Cabras said.

Meanwhile, a "very optimistic scenario" if the economic and financial markets conditions were favourable, saying also said that the combined group might beat its target of becoming the global market leader before 2018, an ambitious target set by Winterkorn. Poetsch added that the merged entity will seek operation in financial services, joint development projects and the use of similar modules in both million euro in annual operating profit from the merger. Poetsch said in a Die Welt interview that although years to achieve.

Outlook and Implications

With the Qatar investment in place, the remaining financial pieces, namely the VW Group's capital pay down the remaining debt, will follow in due course. VW said it will

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