Germany: Porsche Restructures for Merger with Volskwagen

Porsche announced on Thursday (July 23) that its CEO will leave the company immediately after decisions were made to merge with Volkswagen. Wendelin Wiedeking, the CEO for Porsche for the past 16 years, was Germany’s best-paid executive.

[Wolfgang Porsche, Porsche Chairman]:
„Dr. Wiedeking’s achievements are unchallenged and obvious. He brought Porsche from hardship to the top, something which to us was unimaginable beforehand.“

Negotiations between Porsche and Volkswagen were held up over disagreements on how to structure a merger deal. Wiedeking opposed a sale of Porsche to Volkswagen, clashing with Chairman of Volkswagen, Ferdinand Piech who had proposed such a deal.

The Gulf state of Qatar is set to buy a derivatives package that controls 17 percent of Volkswagen shares, further relieving Porsche’s financial woes.

[Michael Macht, Porsche CEO]:
„The involvement of the Emirate of Qatar puts Porsche into a position to look ahead with self-confidence and optimism.“

Porsche is in a billion dollar debt from a botched attempt to build a 75 percent stake in Volkswagen. Weighed down by the debt, Porsche was forced to abandon further stake building earlier this year and to negotiate a merger instead.

At a meeting, Chairman Wolfgang Porsche tried to fight back tears as he spoke.

[Wolfgang Porsche, Chairman, Porsche]:
„The legend Porsche is alive and will never go under. Thank you.“

Porsche and Volkswagen aim to merge by mid-2011.

(NTDTV)