Volkswagen AG agreed to combine with Porsche SE after the departure of the sports-car maker's Chief Executive Officer Wendelin Wiedeking capped a 4-year-long feud for control of the two German manufacturers.
An integration of Volkswagen with the 911 sports-car maker will benefit both automakers in the global market, VW Chief Executive Officer Martin Winterkorn said in Stuttgart, Germany. A Qatar fund will acquire 17 percent of VW, becoming the third- largest investor in the Wolfsburg-based company.
Volkswagen and Porsche, which said on May 6 that they were in talks to merge, were at loggerheads about ways to cut Porsche's 10 billion euros ($12.8 billion) of debt. Wiedeking agreed today to step down after 16 years as CEO. Porsche, controlled by the Piech and Porsche families, owns about 51 percent in VW, Europe's No. 1 carmaker, while the German state of Lower Saxony is the second-largest shareholder with a 20 percent stake.
"They have been doing a lot of projects together, it's a good move for both," said Arndt Ellinghorst, an analyst at Credit Suisse Group AG in London. Also, "they are bringing together the two companies that started together."
Wiedeking choked up after being greeted by resounding applause and horns from hundreds of workers that had gathered in the rain at Porsche's main Stuttgart plant. He told workers that he had come to the conclusion over the weekend that it was time for him to leave and outlined plans to donate half of his 50 million-euro severance pay to a foundation for Porsche workers.
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