This is the classic case of overambition gone wrong. David doesn’t upset the odds this time around and gets swallowed up by Goliath instead. The David here is of course Porsche, the small sportscar maker trying to take control of Volkswagen, the giant that has Audi, Lamborghini, Bentley, Bugatti, Skoda and Seat under its stable. We can now officially add Porsche to that list as VW has completed the deal to take a 49.9 percent stake in the Stuttgart based company for €3.9 billion.
VW describes the move as “the next milestone on the way towards the integrated automotive group with Porsche under the leadership of Volkswagen”. A carmaker as prolific as Porsche would look good in any group’s portfolio, and this acquisition will undoubtedly strengthen VW’s position in the premium sector plus provide synergy in costs.
Best of all (for VW, that is), the Group’s annual operating profit is expected to increase by some €700 million in the long term, thanks to Porsche’s ability to sell cars at a big profit. Porsche’s ex CEO Wendelin Wiedeking took over the reins when Porsche was on the verge of bankruptcy, transforming it into the world’s most profitable automaker. But in trying to usurp VW, he took it a step too far.