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Porsche and Volkswagen set to merge

Written By Faye Sunderland Published On: May 07 2009
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Car makers Porsche and Volkswagen are to merge, it has been revealed after weeks of talks between the two.This means that the intended takeover of Volkswagen by Porsche will not go ahead as expected. It is believed that such a move was blocked by the German state of Lower Saxony which controls 20 per cent share of Volkswagen.As such the proposals for a merger will be finalised over the next four weeks with Porsche and VW liaising with employee representatives and the state of Lower Saxony to finalise the deal. The merger will unite ten car brands under one group to create what Porsche describe as an ‘integrated car manufacturing group’.porsche-vw2In a company statement, Porsche said that the merger would mean that the ‘10 brands shall stand below an integrative leading company alongside each other, whereby the independence of all brands and explicitly also of Porsche shall be ensured.’The news comes following weeks of negotiations between the two companies. Porsche increased their share in Volkswagen to 50 per cent in January and stated that it intended to increase it to 75 per cent. But even with a majority share it would have been unable to take complete control of the company as VW’s home state still controlled 20 per cent and under German law is able to block strategic decisions.

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