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July 24, 2008 11:08:52 PM CDT

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Court Overturns Volkswagen Law, Takeover Likely

Posted Oct 23, 07 8:31 AM CDT in World,  Business 

(Newser) – The EU’s highest court today overturned a 47-year-old German law that protected Volkswagen AG from takeover, opening the door for a long-rumored Porsche coup. Porsche already owns 31% of VW, but the law capped their voting rights at 20%. With that impediment gone, “I see Porsche flexing its muscles and going for outright control,” one analyst told Bloomberg.

The German law didn’t especially protect minority shareholders, according to the ruling, which can’t be appealed. Volkswagen shares are down 2.2% today, but have more than doubled this year on takeover speculation. One Porsche bid was already rebuffed this year. Now, Porsche could simply buy a 50% stake, but isn’t likely to this year, Reuters reports.

Sources Bloomberg, Reuters

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A worker attaches the VW logo to a Volkswagen Golf V in the assembling line at the Volkswagen plant in Wolfsburg, northern Germany, in this Feb. 15, 2007 file picture. The European Union's top court is...   (Associated Press)
Combo shows logos of German car makers Porsche, left, and Volkswagen at the International Auto Show IAA in Frankfurt, central Germany, in Sept. 22, 2005 file photos. The European Union's top court is...   (Associated Press)
A worker takes a VW-emblem for a Volkswagen Golf from a table in the Volkswagen factory in Wolfsburg, northern Germany, in this Feb. 15, 2007 file picture. An EU court ruled Tuesday, Oct. 23, 2007 that...   (Associated Press)
The logo of a VW-Porsche 914, a joint production of Volkswagen and Porsche in the seventies, is seen at a Porsche car dealer in Frankfurt, central Germany, in this Sept. 26, 2005 file picture. The European...   (Associated Press)
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Germany  • European Union  • auto industry  • mergers and acquisitions  • automaker  • European markets  • Volkswagen  • Porsche  • European Court


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