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Porsche set to give VW stake to Qatar, sources say

Posted Thursday, Jun 25, 2009, 2:20 pm in Employee News

Porsche is advancing toward a deal with Qatar to give the Gulf state a shareholding in Volkswagen, a compromise that will clear the way for the car makers to merge, according to people involved in the talks, Reuters reported.

Porsche racked up $12.7 billion of debt trying to swallow its much bigger rival Volkswagen before the financial crisis turned the tables and threatened to unravel the deal, the news service said. The luxury carmaker then entered talks with Qatar about selling a stake in Porsche but, with Volkswagen now set to dominate the marriage to its debt-hobbled partner, Qatar’s interest has shifted to Volkswagen, Reuters said.

Merger talks are on ice until Qatar decides whether or not to invest, the news service said. In a bid to save the deal, Porsche is now prepared to surrender its right to buy about a fifth of Volkswagen’s voting shares, said sources with direct knowledge of the matter. Porsche already owns roughly 50 percent of VW stock, the story said. (Reuters/Automotive News)
 
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