Porsche CEO keen on speedy VW tie-up
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Porsche is pushing for rapid integration of the German sports car maker into Volkswagen to pave the way for cost savings and to erase debt.
VW, Europe's largest car manufacturer, is keen to buy the remaining half of Porsche's core business that it does not already own, but it can only do so without incurring taxes of as much as 1.5 billion euros ($1.9 billion) if its waits until August 2014.
"It's not in the interest of any of the parties to wait that long; neither the companies nor the tax authorities," Martin Winterkorn said on Monday, speaking at Porsche Holding SE's annual shareholder conference in Stuttgart in his capacity as chief executive of the investment vehicle.
Winterkorn, who is also CEO of Wolfsburg-based VW, said that the earlier they can integrate, the more palatable it would be for the government because higher profit at VW and Porsche may yield additional tax receipts.
The companies estimate that they are wasting about 700 million euros a year on idle synergies in purchasing and development while they remain separate entities.
VW acquired 49.9 percent of the Stuttgart-based car maker in December 2009 after a botched attempt by Porsche to take control of its much bigger competitor. Both companies have for months been exploring ways to fold the remainder of Porsche into VW's multi-brand structure.
"All parties concerned would benefit from a swift combination of Volkswagen and Porsche," Winterkorn said. "We want to complete the integrated automotive group as advantageously and as quickly as possible."
Porsche and VW agreed a merger in August 2009 after the maker of the iconic 911 sports car racked up more than 10 billion euros of debt attempting to buy VW. Porsche's holding company still shoulders about 1.5 billion euros of debt.
VW abandoned the merger last September, citing unquantifiable legal risks, including lawsuits by short-sellers in the United States, who claim that Porsche secretly piled up VW shares and later caused investors to lose more than $1 billion.
The deepening sovereign debt crisis in the euro zone will undermine demand for cars in coming months, Winterkorn said, adding: "Darker clouds are gathering around us. The second half of 2012 is certain to become more difficult and challenging."
Global deliveries at VW, which includes the luxury Audi division and Czech unit Skoda, rose 8.4 percent between January and May, to 3.65 million, but declined 6.4 percent in western Europe excluding VW's German home market.