German car maker Daimler is in advanced talks to buy a stake in sports car maker Porsche SE, German magazine “manager magazin” reported on Friday on its website, citing financial sources.
Daimler Chief Executive Dieter Zetsche and Porsche CEO Wendelin Wiedeking had already discussed potential options at the end of May, manager-magazin.de said, citing financial sources.
An industry source told Reuters that the report should be taken seriously.
Separately, another source close to the situation said it was not a surprise if different players in the industry were talking to each other, but “we are nowhere near close to a deal.”
A spokesman for Daimler called the report “pure speculation” and a Porsche spokesman said he had no knowledge of talks with Daimler. A Volkswagen spokesman did not want to comment on the report.
Daimler is wary of big transformational deals after a takeover of Chrysler failed to yield the expected profits.
Daimler recently shored up its capital base by selling a 9.1 percent stake to Abu Dhabi’s state-controlled International Petroleum Investment Company (IPIC) for almost 2 billion euros ($2.78 billion).
The online report said Daimler could acquire a stake in Porsche via a capital increase or it could buy derivative instruments which can be converted into Volkswagen
shares from Porsche, potentially handing Daimler a stake in Europe’s largest carmaker.
Big gains on derivative bets linked to Volkswagen shares offset a decline in nine-month earnings at Porsche SE’s core sports car business, results showed on Friday.
Porsche owns 51 percent of VW’s ordinary shares.
Porsche originally sought to build its voting stake up to 75 percent in order to take full control of VW via a so-called domination agreement, but had to give up on its plans early last month.
In the course of Porsche’s share purchases, it racked up a mountain of debt that it could not refinance as planned using VW’s own cash pile and is now looking for a way to bail itself out by combining with financially solid Volkswagen.
It has asked for German state aid while it is in talks to sell a stake to the Qatar Investment Authority (QIA).