VW, Porsche meet, merger news eyed

[August 13, 2009]  FRANKFURT (AP) -- Officials from German car companies Volkswagen AG and Porsche AG were meeting in Wolfsburg Thursday afternoon amid intense interest about their announced merger.

Observers are anxious to hear what plans the supervisory boards have and what sort of financial commitments are being made in their efforts to form closer ties.

Other questions include the level at which Porsche is valued, how it will raise capital, and if that entails other investors being involved in a new company. A Qatar investment fund, for example, has been named as an interested potential investor.

So far, VW and Porsche haven't commented on any aspect of matters on the table Thursday.

VW, Europe's largest carmaker by sales, is based in Wolfsburg, while Porsche, famous for sportscars the world around, is based in Stuttgart.

In May, Porsche announced it was moving toward creating an "integrated" carmaker with VW, but emphasized it would retain its independence, and last month, Wendelin Wiedeking, Porsche's CEO, stepped down.

That came after Porsche slid deeply into debt in its own efforts to take over VW, an exercise the much smaller Porsche had been pursuing since 2005. Despite the circumstances, Porsche remains Volkswagen's biggest shareholder with about 51 percent of the shares.

Meanwhile, VW and its chairman Ferdinand Piech have pushed for a deal that would see Volkswagen take 49 percent of Porsche and fold the lucrative luxury-car business into its portfolio, widening its range in anticipation of a recovery in the luxury car market. Piech is also part of the family that controls Porsche.

Rumors have been circulating that other Porsche management will meet on their own in Stuttgart, but a Porsche spokesman said that was not the case.

Meanwhile, an extraordinary meeting of Volkswagen workers is scheduled for Friday in Wolfsburg.

Shares of VW were 2.6 percent higher at euro232 ($329), while shares of Porsche Automobil Holding SE were 3 percent higher at euro45.27 in Frankfurt morning trading.

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On the Net:

http://www.volkswagen.com/

http://www.porsche.com/

[Associated Press; By GEORGE FREY]

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