Volkswagen likely to buy out Porsche sports car brand by 2012 year end: What that 50.1% means

There is a possibility that Volkswagen would be procuring Porsche, the sports car makers by the end of this year. While VW owns a share in Porsche it has been eying the balance 50.1% and as per a Dow Jones Newswire report, talks are on for the purchase of this balance share.

Porsche has offered the balance 50.1% to VW which should be procurable by the end of this year while VW will be negotiating the deal between March and April of this year, as purchase prior to that will entail an exorbitant rate of taxation as per laws in Germany.

VW and Porsche have been looking towards a liaison which commenced with Porsche looking to purchase VW a couple of years ago. Mr. Martin Winterkorn, Chief Executive Officer of VW and Porsche, speaking at the Detroit Auto Show earlier this month said that they will be offering every sort of support to Porsche so that a quick and effective takeover would be affected. In his words, “We want to cooperate with Porsche in such a way that as many synergies can be leveraged as soon as possible without needing to have a lawyer stand next to a Porsche employee every time he screws something into a Volkswagen or vice-versa.”

With Volkswagen and Porsche having long thought about consolidation, it looks like that could finally be a reality. Previously, Porsche looked at buying VW years ago, but that deal never saw the light of day. In retrospect, German laws bound VW to buy a share in Porsche. While both auto brands share top management, operations are carried out as two independent companies would.