VW Moves Ahead on Porsche and Karmann Buys

Contracts prepared, final approval expected shortly.

by on Nov.20, 2009

Victor and vanquished.  Ferdinand Porsche, (left) Chairman of the company bearing his family name, meets with Ferdinand Piech, Chairman of Volkswagen.  The larger maker beat back a takeover bid by Porsche and will now "merge" with the sports car maker - on its terms - in 2011.

Wolfgang Porsche, (l) Chairman of the sports car maker, with Ferdinand Piech, Chairman of VW. The larger maker beat a takeover bid by Porsche and will own it all by 2011.

At a meeting earlier today in Germany, the Supervisory Board of Volkswagen Aktiengesellschaft approved the acquisition of land and machinery formerly belonging to the bankrupt Karmann holding company at the Osnabrück site. Karmann has a long history of building products based on VW products, the most famous of which is the Karmann Ghia sports car.

VW plans on establishing a new car-manufacturing subsidiary and will begin vehicle production in Osnabrück in 2011. VW says this will create more than 1,000 jobs by 2014. Some 200 technicians will be employed starting next year to set up the vehicle project.

In a statement VW said, “employees and former employees of Karmann have extensive experience in the production of small series models, and this experience will be accessed in line with requirements.”

Volkswagen will hold final negotiations with the shareholders of the Karmann and the bankruptcy administrator on the basis of today’s board decision.

The board also approved contracts for its takeover of Porsche in a series of steps. Porsche’s controlling shareholders, the Porsche and Piëch families need to sign the papers, but for all practical purposes the battle for the ownership is now over, with VW winning. VW said last month that it will pay €3.9 billion (~$5.8 billion) for a 49.9% stake in the Porsche by year end. It will takeover the rest of the famed sports car maker by 2011.

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