Porsche AG is owned by Porsche Automobil Holding SE “PORSCHE SE”. The company is basically owned by the Piech and Porsche families, along with The Qatar Investment Authority who holds a 10% share. The company is headquartered in Zuffenhausen. Through its investment in Porsche Zwichen holding GmbH, it owns 50.1% of Porsche AG, and 50.7% of Volkswagen AG.
The company was founded by Ferdinand Porsche in the year 1931 along with Porsche’s son-in-law Anton Piech, an Austrian Lawyer.
As a result of the present ownership structure, it can be said that Porsche is closely related to the Volkswagen brand, and all the companies that come under its ownership, such as Audi, Lamborghini, Seat, Skoda, Bentley etc.
However, unlike the brands that are directly owned by Volkswagen AG (where all brands share platforms to a certain extent) Porsche cars are more unique and have its own identity, character and image (except for the Cayenne SUV, which shares its platform with VW’s PL 7).
POSCHE AND VOLKSWAGEN MERGER [HOW IT ALL HAPPENED]:-
Porsche is renowned the world over not just for manufacturing iconic sports cars, but also for being a very profitable Car manufacturer. In the year 2008, Porsche made 6 times as much on the stock market as it did making cars. Thus it became one of the worlds most profitable company. Porsche maintained that its stock market trades were for one sole purpose – To take over Europe’s largest Car manufacturer, Volkswagen.
The real story
The names Porsche and Volkswagen have always been related to each other. Ferdinand Porsche designed the Volkswagen Beetle in the 1930’s. He then went on to start his own company, which went on to become famous as a Sports car Manufacturer. The Porsche family still owns the company, and now wanted to own Volkswagen itself, a company about 14 times the size of Porsche. Volkswagen is a giant, which owns major European Car brands such as Audi, Bentley, Bugatti, Lamborghini and Seat.
The recession of the early 1991’s hit Porsche really hard. It was a very bad time for Porsche, and their very own survival was at risk. It was then that Wendelin Wiedeking was appointed Chief executive. He is, along with the Chief finalcial officer Holger Haerter, widely credited for turning the companies fortunes around.
Wiedeking had taken extremely risky decisions, to come up with new models. They also had to slash production costs, and more importantly used Porsche’s cash to enter the financial markets. These factors proved crucial to Porsche reaching the stage to win its goal – to take over Volkswagen.
From the year 2005, Porsche began increasing its share in Volkswagen, and by September 2008, it had acquired 35.14% of Volkswagen. This was said to be done so, to win over the so-called VW Law. The law was brought into place to prevent a hostile takeover of Volkswagen. This meant that any company trying to buy Volkswagen needed atleast 80% majority of the shares. This gives the German state government of Lower Saxony a share of 20.1%, a blocking majority.
In October 2008, Porsche announced that it had increased its stake in VW to 42.6%, and held cash settled options on a further 31.5%, which meant that it had over 74.1% shares of Volkswagen.
Porsche built up its holdings by using cash settled options (These call options basically give the buyer the option to buy shares at a competitive price at a future fixed date). Porsche were able to make the most out of this.
*Reference -bbc.com by Emily Hughles – [Online] available from <http://news.bbc.co.uk/1/hi/business/7843262.stm,>
* Image – [Online] available from <http://www.auto-types.com/autonews/volkswagen-buys-half-of-porsche-5742.html>
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