Volkswagen to acquire Porsche - Wiedeking to step down and major network changes in Middle East expected

Europe's biggest car manufacturer Volkswagen AG is planning to purchase all of Stuttgart-based sports carmaker Porsche, which has run into massive financial problems linked to its overly ambitious plan to take control of Volkswagen. Such a take-over is expected to be influencing the Porsche networks world-wide, and especially the networks in the Middle East and North Africa

The attempted takeover last year, which had been financed using loans, failed at the end because of the credit crunch and ensuing liquidity problems that almost saw Porsche go bankrupt.

Once this take-over is completed, Porsche will become the 10th brand in the stable of Volkswagen.

The VW-Porsche deal sees a payout to Porsche Automobil Holding of €8 billion ($11.3 billion), enabling it to pay off the bulk of its debts. Volkswagen also considers acquiring Porsche's Salzburg-based network of dealerships from its family owners. Such a move could raise an addition €3 billion for Porsche.

Under this deal, the Porsche and Pi?«ch families, Porsche's shareholders, would obtain 50 percent of the shares in the newly merged Volkswagen-Porsche company, while the western German state of Lower Saxony would maintain its 20 percent holding in the company. The door would then be open for the emirate of Qatar to purchase between 14.9 percent and 19.9 percent of the company's shares.

Media sources in Germany also reported that Porsche's current CEO, Wendelin Wiedeking, would step down and that the Porsche- and Piech families had agreed to replace him with Porsche production chief Michael Macht. If Wiedeking will have to step down, he might be up for a deal worth more than 100 million Euros.

Sources close to Volkswagen said that such a take-over would have a big impact not only on the Porsche network in Europe, but also on the Porsche network in the Middle East and North Africa.