Factbox: Proposed terms of VW/Porsche integration

(BestGrowthStock) – Following is a summary of the deal as set out so far:

* PORSCHE AG STAKE:

— Volkswagen acquired a 49.9 percent stake in Porsche’s sports car business for 3.9 billion euros ($5.8 billion) in December 2009. Volkswagen valued Porsche AG and Porsche Holding, Europe’s largest car dealership group, at a combined total of 16 billion euros in equity and debt.

— On November 24, 2009, VW entered into an agreement with Porsche that grants Porsche Holding Salzburg the right to sell the operating trading business to VW by December 31, 2013.

* CAR DEALERSHIP:

— The Porsche and Piech families will sell their automobile dealership business — Europe’s largest, with annual unit sales of 474,000 vehicles — to VW from 2011. The business was assigned an enterprise value of 3.55 billion euros.

* VW CAPITAL INCREASE:

— In March 2010, Volkswagen launched its announced capital increase, issuing up to 65 million preferred shares to finance its merger with Porsche, and will raise net proceeds of about 4.1 billion euros ($5.46 billion).

* PORSCHE CAPITAL INCREASE:

— Porsche SE will issue new voting and preference shares, probably in the first half of 2011. It gave no details, but sources close to the situation have said its owner families aim to raise around 5 billion euros.

* LOWER SAXONY:

— VW’s home state will maintain the right to veto strategic issues and to name two VW supervisory board members. This will be anchored in VW’s articles of association.

* FISCAL YEAR:

— With regard to the creation of an integrated automotive group with Volkswagen, the fiscal year of Porsche, which currently runs from August 1 to July 31 of the following year, should be changed to run concurrently with the calendar year effective January 1, 2011. An abbreviated fiscal year will be created for the period from August 1, 2010 to December 31, 2010.

* MERGER TERMS:

— The exact merger terms are to be set in time for a deal to conclude in 2011. The extended Porsche and Piech clan will remain the largest shareholders with a stake of 35 to 40 percent, followed by Lower Saxony. The Gulf state of Qatar is in advanced talks that could make it the third-largest shareholder in VW.

— The combined company will have 10 brands, adding the Porsche marque to a stable that already includes Audi, Bentley, Bugatti, Skoda, Seat and Lamborghini.

— Porsche’s creditor banks and regulatory authorities have to approve the merger.

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(Reporting by Michael Shields and Edward Taylor; Additional writing by Carl Bagh, Editing by David Cutler)

Factbox: Proposed terms of VW/Porsche integration