Porsche buys VW

The German luxury sportscar maker Porsche has taken over Volkswagen, the biggest European car manufacturer, after purchasing more than 50 percent of VW shares, Porsche said late on Monday.

Porsche said in a brief statement that by buying new VW shares, it "will thus increase its participation to 50.76 percent" of the group's capital, compared with 42 percent before.

As a result, Porsche is now obliged by Swedish law to make an offer for outstanding shares in the heavy truck maker Scania, in which VW is the dominant shareholder.
At one point, they traded for more than 1,000 euros (1,350 US dollars) per share, making VW briefly the biggest company in the world by stock market valuation.

On Monday, VW shares closed at 254.74 euros, close to the range Porsche had set for itself of between 200-250 euros.

VW said in August that it had overtaken Ford to become the world's third biggest automaker behind General Motors and Toyota.



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"Ordinary shares in VW gained over 6 percent to trade above 270 euros by 0955 GMT, helping to drive the European autos subindex .SXAP 3.2 percent higher. German blue chips .GDAXI gained just 0.7 percent.

Porsche shares were up 1.1 percent at 54.49 euros.

A Porsche spokesman confirmed late on Monday that the company still planned to increase its stake in VW to 75 percent at some point this year, given a favourable market environment.

"I think Porsche will stick with its 50 percent this year, since it would just be burning money to raise its voting stake to 75 percent at current prices," said NordLB's Frank Schwope.

The analyst did not expect a clause in both the Volkswagen Law or the VW statutes to be abolished before the end of 2010, which requires Porsche muster at least 80 percent support before gaining full control over management and cash flows via a so-called Domination and Profit Transfer Agreement."