Volkswagen, Porsche, Scania plot grand European auto alliance

03 March 2008

Mumbai: Auto giants Volkswagen and Porsche have signalled a massive alliance in the car- and truck-making industries Europe wide, with Volkswagen taking a controlling stake in Swedish rival Scania while luxury carmaker Porsche proposed to take a majority stake in Volkswagen.

German sports car maker Porsche said it would increase its 31 per cent voting stake in Volkswagen to a majority without merging the two carmakers.

Porsche's supervisory body also authorised the move, which the company said would represent an investment of almost 10 billion euros ($15.17 billion).

Lifting its stake above 50 per cent would not require Porsche to make a full bid for VW, because it made an offer at the legal minimum price last year that few investors took up.

Meanwhile Volkswagen, Europe's biggest automobile manufacturer, has already acquired controlling stake in Swedish rival Scania, paving way for its merger with MAN that would create the biggest European manufacturer of heavy trucks

Volkswagen, has acquired a 37.73 per cent direct stake and a 60.8 per cent voting right in Swedish rival Scania.