Volkswagen says they had agreed upon the deal that they will buy the remaining 50.1% Porsche for $5.6 bln. The two firms had agreed in 2009 to collaborate by the end of 2011, but due to legal obstacles couldn’t do so.
Volkswagen will pay 4.46bn euros ($5.6bn; £3.6bn) plus one VW common share to acquire the stake.
Hans Dieter Poetsch, chief financial officer of Volkswagen said,”The accelerated integration will allow us to start implementing a joint strategy for Porsche’s automotive business more quickly and to realize key joint projects more rapidly.”
As it seeks to become the world’s biggest car-maker, the deal is likely to reduce costs and boost Volkswagen’s earnings.
Volkswagen had acquired a 49.9% stake in Porsche in 2009 and the remaining 50.1% was due 2011 o b bought. Both the firms had been eager bout to accelerating the collaboration. However, one of the obstacles for the deal was the likelihood of a big tax bill for both the firms.
“It’s a great deal for Volkswagen, both financially and in operative terms,” said David Arnold, an analyst with Credit Suisse.
Meanwhile, Volkswagen said in a statement that “the accelerated integration model that has now been agreed can be implemented on economically feasible terms.”