Volkswagen and Porsche are trying their best to create an integrated car group, which will deliver greater synergies than the €700m previously identified.
Porsche Automobil Holding SE, which owns half of the Porsche carmaking business as well as 50% of VW, had to abandon a merger attempt in September 2011 due to legal risks arising from Porsche’s failed attempt to take over VW in 2008. Hans Dieter Poetsch, VW and Porsche SE chief financial officer, said that about €500m in synergies are in the works and additional synergies could be achieved if the two companies were integrated.
“The [original] estimate was a bit too conservative,” he said. “That means that it is worth considering whether now the merger is not available we can find a possible path that leads somewhat earlier than 2014 to the integrated car company.”
Martin Winterkorn, chief executive of the Porsche holding and also the boss of VW, declared that an integrated automotive group of Volkswagen and Porsche will be realized.
“We want to combine the enormous strengths of Volkswagen and Porsche. We want to leverage the strengths even more efficiently. And we want to exploit the rising synergies to the full.”
As a result of Porsche’s failed attempt to take over VW in 2008, the company faces a total of anywhere between €5billion and €10billion in potential legal liabilities, triggering a surge in VW’s share price and causing large losses for hedge funds. In 2011 revenues at Porsche’s car business rose to €10.9 billion due to record sales of 117,000 vehicles, up 21% compared to the previous year.