Volkswagen (VW), Europe’s biggest automaker, is to wrap up its takeover of German luxury sports car group Porsche two years earlier than planned in order to unlock hitherto untapped economies of scale.
In a statement issued late on Wednesday, the two companies — which have been seeking to merge since 2009 — said they had found a way to integrate their two businesses “some two years earlier than would have been economically feasible” under their previous plans.
The news sent VW shares jumping more than 4 percent in early trade yesterday, when they were the biggest gainers on the blue-chip DAX 30 share index.
Under the deal, which they said would unlock 320 million euros (US$400 million) in net synergies, VW is to pay Porsche’s current holding company, Porsche SE, 4.46 billion euros plus one VW share for the 50.1 percent it does not already own in the sports car maker.
VW initially acquired 49.9 percent in Porsche in 2009 in the first stage of a complex takeover agreement, the completion of which has since run into a number of legal and tax hurdles.
Prior to VW’s takeover of Porsche, the sports car maker had itself tried, but failed, to swallow the much larger VW, running up more than 10 billion euros of debt in the process.
When VW announced its takeover plans for Porsche in 2009, its initial goal was a merger with Porsche SE, which currently holds a 50.7 percent stake in VW and a 50.1 percent stake in Porsche AG.
However, it quickly shelved such ambitions in the face of dozens of lawsuits by hedge-fund investment managers seeking billions of dollars in damages from Porsche related to the failed takeover attempt.
Under the new merger structure, which also has the advantage of averting massive tax payments for VW, Porsche SE will contribute its operations as a holding company, including its 50.1 percent Porsche stake, to Volkswagen AG, which already holds indirectly 49.9 percent of Porsche AG, the statement said.
“Once the transaction has closed, Volkswagen will hold 100 percent of the shares of Porsche AG via an intermediate holding company,” it explained.
VW’s brands currently include Volkswagen, Audi, Skoda, SEAT, Bentley, Bugatti and Scania and MAN trucks.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
SIZE MATTERS: Medium-sized hotels that do not have the support of parent groups are more vulnerable and are forced to take action, a REPro Knight Frank researcher said About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic. Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return. The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel. Occupancy rates for hotels in
‘SENSITIVE MARKETS’: The previously unannounced project would involve the company handing over control of data to a third party to sidestep privacy concerns Google has abandoned plans to offer a major new cloud service in China and other politically sensitive countries due in part to concerns over geopolitical tensions and the COVID-19 pandemic, two employees familiar with the matter said, revealing the challenges for US tech giants to secure business in those markets. In May, the search giant shut down the initiative, known as “Isolated Region” and which sought to address nations’ desires to control data within their borders, the employees said. The action was considered a “massive strategy shift,” said one of the employees, who added that Isolated Region had involved hundreds of employees
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted monthly revenue that suggested second-quarter sales surpassed analysts’ estimates, underscoring how its technological lead is helping the chipmaker weather the COVID-19 pandemic and US sanctions on its second-biggest customer Huawei Technologies Co (華為). Apple Inc’s main iPhone chipmaker posted sales of NT$120.88 billion (US$4.08 billion) for last month, up 40.8 percent year-on-year and bringing its revenue for the second quarter to NT$310.7 billion, beating the NT$308.8 billion analysts expected on average. TSMC, a barometer for the industry thanks to its heft in the global supply chain, had previously lowered its revenue outlook for this