Volkswagen AG says it will pursue an eventual combination with Porsche but vows the sports car maker will not lose its independence.
Wolfsburg-based Volkswagen says its supervisory board, the German equivalent to a U.S. board of directors, plans to hold talks with Porsche SE “in order to reach a final concept fulfilling this goal.”
VW says that the new company will be achieved by the “gradual involvement of Volkswagen in Porsche AG,” Porsche's car making unit, and the subsequent merger of Volkswagen with Porsche SE, the holding company for the auto maker.
Sportscar maker Porsche conceded a months-long power struggle to mass-market rival Volkswagen by removing its chief executive and said it would raise at least €5-billion in equity as the two prepared for a merger.
After an all-night meeting of its board of directors, Porsche said Wendelin Wiedeking, Germany's best-paid executive and its CEO for the past 16 years, along with finance chief Holger Haerter, would quit the group immediately.
Their hasty exit will be sweetened by payoffs of €50-million and €12.5-million, respectively.
Mr. Wiedeking had opposed selling Porsche to Volkswagen, which would have helped the company reduce the debt he had run up in a botched attempt to take over VW. He will be succeeded by Porsche's production head Michael Macht, the board said in a statement early on Thursday.
The meeting of the non-executive directors, which include the Piech and Porsche families that between them control Porsche, approved Mr. Wiedeking's proposal to raise fresh equity – either in cash or through a contribution in kind – and endorsed talks to sell a stake to the Gulf state of Qatar.
“This should lay the foundations for the creation of an integrated automobile group consisting of Porsche SE and Volkswagen,” Porsche said.
It was unclear from Porsche's statement who would contribute to the capital increase and whether it would be taken up by Qatar. A Porsche spokesman declined to comment further.
The board's unanimous approval signals that the powerful Porsche and Piech clans may be open to surrendering some of their influence at the maker of the 911 sports coupe.
Between them they control 100 per cent of Porsche's voting shares and have resisted selling a stake to an outsider.
Porsche SE, the holding company that controls sports car maker Porsche AG, needs to bolster its finances after accumulating more than €10-billion in debt through its botched attempt to seize control of VW.
Porsche was forced to abandon attempts to win control over 75 per cent of VW, leaving it with a stake of nearly 51 per cent. The failed takeover attempt opened the door to Ferdinand Piech, VW's powerful chairman and himself a part-owner of Porsche, to turn the tables on Porsche.
The Porsche and Piech families had been at loggerheads for months over how to resolve the company's debt woes and the role VW would play. Mr. Piech has pushed for VW to take over Porsche, on condition that Porsche fixes its finances first.
