In what is technically described a merger (to avoid a €1bn tax bill) VW have bought the remaining half of Porsche they didn't already own. VW and Porsche said they have finalised plans to form a merged group that sees Porsche join the vast VW empire bringing together Bugatti, Bentley and Lamborghini as well as Seat, VW, Audi and Skoda.
VW will pay Porsche €4.46bn and one VW share for 50.1% of Porsche. They already own the other 49.9%. The deal will apparently yield €320m in net synergies.
Porsche and VW share a history going back to the 1930s when Ferdinand Porsche designed the first Beetle. In 1969 they collaborated on the 914 and in the eighties the Porsche 924 had a VW engine. In fact the two companies have until recently been owned by the same family - the Piechs and the Porsches.
In 2007 Porsche attempted to take over VW which caused panic buying on the markets, inflated the VW share price and briefly made VW the most valuable company in the world. The attempted take-over cost Porsche a massive €4.6bn in lawsuits and legal bills.
But now the dust has settled and, with Porsche's weakened financial position, VW has pounced.
VW is generally regarded as having a positive impact on the brands it takes over. Skoda and Seat went from poorly performing regional companies to global super-brands as part of the VW empire and Lamborghini, Bugatti and Bentley have benefited from the long-term planning and financial stability that VW have brought.
This brings us to what VW will bring to the current Porsche range and whether current models will be seen to compete in the same market sector. Premium car companies have largely survived the recent global downturn and Porsche is no exception. Sales have held up well. Porsche have the following models on their books:
Boxster. Gaining iconic status. What first started as a poor man's Porsche the Boxster is now appreciated for it's handling and looks as well as performance and sells well - particularly in Britain. Only the Audi TT is similar but the Boxster and TT are seen as sufficiently different in terms of image and handling to survive alongside each other.
Cayman. A Boxster with a roof. It adds to the Boxsters cachet with increased stability and is closer to a mini 911 than it's convertible sibling. Again, the Cayman has no real competition in the VW empire aside from the TT.
911. One of the world's most iconic cars. Born in 1963 and refined over the past fifty years.
Stubbornly retains the engine over the rear axle. Only Lamborghini shares the 911's market sector but the technology, design and image of the cars are so different as to be no threat to each other within a unified VW group.
Panamera. With looks that divide opinion this super-fast, four door, sports cruiser is uniquely Porsche but may be quietly dropped over the next few years as it does steal market share from Bentley.
Cayenne. Basically the same as VW's prettier Toureg. The Porsche name may steal a few sales from the Toureg but low secondhand prices show that the Cayenne doesn't have the same status amongst aficionados as the 911 or Boxster. Probably won't disappear from the line-up due to the low costs of keeping it on the books.
