VW closer to swallowing Porsche

[Bruce Nunnally]

http://dealbook.blogs.nytimes.com/2009/11/...porsche-merger/

Volkswagen said Friday that its supervisory board had approved certain agreement contracts for the planned merger with German sportscar builder Porsche, taking the companies one step closer to completing the deal.

The contracts set out the organizational, structural and legal details of the agreement which was first announced in May and which is hoped to be concluded in 2011, The Associated Press reported.

The next step of the process will be VW shareholders approving that the company take on a 49.9 percent stake in Porsche A.G. through the issuance of new shares. An extraordinary VW shareholder’s meeting is planned for Dec. 3 to take a vote on that issue.

”The creation of an integrated automotive group with ten strong brands follows a compelling industrial logic,” VW, based in Wolfsburg, said in a statement.

If you were not keeping up, Porsche was trying to swallow VW when the financial crisis came along, and they ran out of money and time (overextended).

Now VW is 'rescuing' Porsche by buying them instead. VW and Porsche were always closely related anyway, but this is a big change.