Porsche AG’s attempted takeover of Volkswagen AG not only hit a tight snag, but it has now resulted in the first and highest-profile casualty of the whole thing. Dr Wendelin Wiedeking now former CEO, resigned on Thursday after a shareholder’s meeting. I say he was pushed, but then again, you say potato, I say potato. No difference.
Wiedeking, credited with approving controversial cars like the Cayenne and Cayman while making Porsche the most profitable car company in the world, had been accused of blocking the proposed merger with VW. Porsche had slowly been stacking up VW shares over the past year or so and had since amassed an amount equal to just over 50%.
Last week it was widely reported that Wiedeking had demanded a €100 million golden parachute to leave the company, but it turns out he was actually offered this money to resign. Had he actually demanded what was contractually due to him he would have left with between €170 and €260 million (R2.9 billion). Instead he took €50 million but said half would be donated to charity and some would be used for the improvement of life in his home country.
The tables have now turned as Porsche struggles to sell cars, make money and pay off its debt which was gathered while trying to acquire its bigger cousin. Some reports have put the debt at a staggering €14 billion (R154 billion). Part of the financing would be coming from the Gulf state of Qatar which would have provided funding to buy up to 20% of Porsche.
Volkswagen is set to buy Porsche for an amount rumoured to be €8 billion (R88 billion). That means the VW Group, Europe’s biggest car maker, will have the following brands under its wings; Volkswagen, Audi, Bentley, Skoda, SEAT, Bugatti, Porsche and Lamborghini. The last three coupled with high-end Audis could be problematic as they battle to lure a similar profile kind of customer.
*picture courtesy of Badische-Zeitung
