Porsche boss axed as part of VW tie-up
PORSCHE conceded defeat in a months-long power struggle with Volkswagen yesterday by axing its embattled chief executive, paving the way for VW to merge with the maker of the 911 sportscar.
The luxury carmaker said Wendelin Wiedeking, its chief executive for the past 16 years and Germany’s best-paid executive, would leave the group immediately, along with finance chief Holger Haerter.
As a way to improve its negotiating position with Volkswagen, Porsche said it would raise at least €5bn (£4.3bn) as the two prepared to create an “integrated automotive group.”
Meanwhile, Volkswagen said in a statement it would buy a stake in Porsche, the company’s financially healthy sports car business, and “gradually” expand this over time.
The two companies aim to complete the merger by mid-2011, said Christian Wulff, premier of Lower Saxony, the German state that is Volkswagen’s second largest shareholder.
“I’m optimistic that we can lay out the details of our agreement in principle during a supervisory board meeting on August 13,” he added.
In addition Wulff said the Gulf state of Qatar is set to buy a financial derivatives package that controls 17 per cent of Volkswagen shares, in a further move to ease Porsche’s financial woes, and could expand its stake by buying non-voting preferred shares.
Porsche amassed over €10bn in debt during a botched attempt to build a 75 per cent stake in VW. Weighed down by the debt, Porsche was forced to abandon further stakebuilding earlier this year and negotiate a merger instead.
Porsche’s veteran chief executive, Wendelin Wiedeking, opposed a sale of Porsche to Volkswagen, clashing with Ferdinand Piech, the 72-year-old chairman of Volkswagen and grandson of Porsche’s founder, Ferdinand Porsche.