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Porsche buys additional Volkswagen shares

Luxury carmaker Porsche AG said Friday it has purchased an additional 8.27 percent of Volkswagen AG as part of its plan to acquire a stake of around 20 percent aimed at blocking any hostile takeover of its automaking partner.

Porsche said it now holds 18.53 percent of Volkswagen and could buy 3.4 percent more. It said it had acquired the additional shares from institutional investors.

The company also said Germany's Federal Cartel Office had given its approval to the transaction.

Porsche did not say how much it paid for the new stake, but VW shares closed Friday at 49.74 euros ($60.40), up 0.3 percent. Its own shares closed down 0.7 percent at 614.65 euros ($746.43) in Frankfurt.

Stuttgart-based Porsche has said it is seeking to become the largest shareholder in Volkswagen to secure their relationship against a possible hostile takeover. Volkswagen is a supplier for some 30 percent of Porsche's production, and the platform for Porsche's Cayenne sport utility vehicle is produced at a Volkswagen plant in Leipzig.

The stock purchase has provoked criticism from some stock market analysts, who say it appears more aimed at protecting Volkswagen than supporting Porsche's interests.

Volkswagen's board chairman, Ferdinand Piech, also sits on Porsche's supervisory board. He is the grandson of Ferdinand Porsche, the designer of VW's original Beetle model, and the Porsche and Piech families own more than half of Porsche's stock and voting shares.

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Earlier, German magazine Focus reported, citing supervisory board sources, that DaimlerChrysler wanted to buy a stake of around 20 percent in Volkswagen.

However, a member of the supervisory board at DaimlerChrysler, speaking on condition of anonymity, told Reuters that there was no plan to buy a stake in VW.

"Volkswagen has raised the subject many times and it never led to a result," said a DaimlerChrysler spokeswoman, but declined to comment on whether Daimler planned to buy a stake in VW in the future.

"I can confirm there are talks with VW on projects such as transporters and minivans," she said.

The head of DaimlerChrysler's market-leading trucks and buses division called the reports "speculation."

"We work and talk with them very often, anything over and above this is pure speculation," Commercial Vehicles chief Andreas Renschler said.

Volkswagen declined to comment on the report.

The magazine said talks were already at an advanced stage.

It said outgoing chief executive Juergen Schrempp was in favor of the idea but wanted to leave the final decision to designated successor Dieter Zetsche, and he in turn wanted to complete the deal by February or March next year.

The magazine also said there was discussion of a cross-holding between the companies, with VW buying a stake in DaimlerChrysler.

Luxury carmaker Porsche said on Wednesday it had bought a 10.26-percent voting stake in VW in an effort to become VW's largest shareholder, with a holding of around 20 percent.

Shares in Daimler fell 1.3 percent to €43.92 by 1019 GMT, underperforming slight declines in the DJ Stoxx European autos index. VW shares rose 0.6 percent to €50.61.

"The probability of Daimler buying a stake in VW has probably sunk after Porsche said it would acquire one," said Bankhaus Sal. Oppenheim analyst Michael Raab.

"There are some areas like research and development where it makes sense to partner up and split the cost," he continued, citing hybrid collaborations between VW and Porsche on the one hand and Daimler, BMW and GM on the other.

"The question is whether one needs to buy a stake to accomplish this. I would prefer contractual partnerships."

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Imhotep Evil

I don't know about this.
IMO either Porsche will reform VW AG to get rid of the waste, ineficiency, incompetence and coruption or it will be draged down by it.

Deutsch

It's quite obvious that this is a family thing. it all makes sense w/ Piech sitting on the Porsche and VW boards, but w/ recent reports, looks like VW could be pressuring Piech to step down, there appears to be some sort of conflict of interest. Smart man he is.

Imhotep Evil

How is he smart ?!
He's the one responsable for much of the mess VW is in right now.

Hope the board will oust him.

Deutsch

If you read anywhere inbetween the lines you'd figure that I share that exact same sentiment.

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