German auto giant Volkswagen (VW) has taken complete control of its compatriot sports car company Porsche. The takeover was completed through an intermediate holding company Porsche SE.
The deal which sees Volkswagen having a 100 per cent stake in Porsche is said to be worth 4.6 billion Euros and will also include one VW share for the sports car company. The new deal has been structured so that VW avoids paying large amounts of tax.
The move had been planned for 2014 but they decided to take the step two years earlier to streamline production and facilities in the light of the current economic climate. It will also see the implementation of a joint strategy for both companies.
The German auto giant had been making attempts in this regard since 2009 but constantly faced legal problems. This merger is in contrast to when Porsche attempted to buy a large stake in VW in 2007 but failed after it went in to massive debt. It then turned to VW to bail it out and this resulted in VW buying a 49.1 per cent share in Porsche.
