Court Overturns Volkswagen Law, Takeover Likely

Porsche to exercise control in VW

By Kevin Spak, Newser Staff

Posted Oct 23, 2007 8:31 AM CDT

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Court Overturns Volkswagen Law, Takeover Likely — 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 to decide Tuesday Oct. 23, 2007 whether Germany's so-called "VW law" is legal in a ruling that will... (Associated Press)

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. (More Porsche stories.)

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