German carmaker Volkswagen AG today took the second step in its multi-stage integration with Porsche SE, acquiring a 49.9 per cent stake in its luxury sports car business for €3.9 billion ($5.8 billion).
"The next important step on the way towards the integrated automotive group with Porsche has therefore been completed, as announced, before the end of the year," Volkswagen said in a press release.
The €3.9 billion price is based on the enterprise value for Porsche AG calculated under a careful due diligence and valuation procedure, it said.
"The acquisition of the trading business of Porsche Holding Salzburg is planned for 2011. The creation of the integrated automotive group is then to conclude with the merger of Volkswagen AG and Porsche SE during the course of the same year," it added.
Volkswagen had convened an extraordinary general meeting of its shareholders last week for the implementation of a comprehensive agreement signed in August and subsequent agreements signed in November.
"The combination of the two companies follows a compelling strategic, industrial and financial logic. For the Volkswagen Group, Porsche ideally complements the brand portfolio. The Stuttgart-based carmaker will allow Volkswagen to further expand its position in the premium business, which offers particularly strong earnings. In turn, as an independent brand under the roof of the Volkswagen Group, Porsche will have the potential for significant additional growth," the release said.
The transaction will have a sustained positive effect on the Volkswagen Group's earnings. With a return on sales of 10.3 per cent, Porsche AG is the world's most profitable automobile manufacturer. Besides, the planned integration of Porsche in the Volkswagen Group and the associated closer cooperation will help realise significant synergies on both the income and the cost side. Volkswagen Group expects its annual operating profit to increase by some €700 million in the long term.