Volkswagen aims to wrap up Porsche purchase on Aug 1
BERLIN/FRANKFURT (Reuters) - Volkswagen (VOWG_p.DE) aims to wrap up its long-awaited purchase of sports-car maker Porsche (PSHG_p.DE) on August 1, two years before a planned target date to complete the deal free of tax.
Porsche SE, the holding company that still controls about half of the sports-car business that VW does not already own, will receive 4.46 billion euros ($5.58 billion) plus a single common VW share, VW said in a statement on Wednesday.
"The accelerated integration will allow us to start implementing a joint strategy for Porsche's automotive business more quickly and to realize key joint projects more rapidly," VW chief financial officer Hans Dieter Poetsch said.
Full consolidation of Porsche's auto-making operations in VW's accounts will boost VW's full-year financial result by more than 9 billion euros and shrink its net liquidity by about 7 billion euros, the company said.
Europe's largest carmaker and Porsche have been pushing for rapid integration of their automotive businesses to pave the way for cost savings of about 700 million euros a year and to erase about 2 billion euros of debt at the sports-car maker's holding company.
VW acquired 49.9 percent of the Stuttgart-based manufacturer 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 avoid taxes of as much as 1.5 billion euros that would kick in if VW were to seal the purchase before August 2014.
Submitting a single common share to Porsche SE may classify the deal as a restructuring under Germany's so-called reorganization tax law and help VW avoid tax payments.
"The accelerated integration model that has now been agreed can be implemented on economically feasible terms," VW said in the statement.
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.
VW abandoned the merger last September, citing unquantifiable legal risks, including lawsuits by short-sellers in the United States and Germany, who say Porsche secretly piled up VW shares and later caused investors to lose billions of dollars.
David Arnold, a London-based analyst with Credit Suisse, said the deal would inflict no taxes on VW and at 4.46 billion euros, cost the Wolfsburg-based company only about half as much as a full-blown merger, costs for which he pegged at more than 8 billion euros.
"It's a great deal for VW, both financially and in operative terms," Arnold said.
VW and Porsche will hold a joint news conference to outline details of the planned integrated car maker at 0800 GMT on Thursday in Wolfsburg.
($1 = 0.7994 euros)
(Editing by Dale Hudson)
BEIJING/HONG KONG - China reiterated its opposition on Thursday to a European Union plan to limit airline carbon dioxide emissions and called for talks to resolve the issue a day after its major airlines refused to pay any carbon costs under the new law.