FRANKFURT, Germany – Volkswagen aims to close the purchase of the sports car manufacturer, Porsche, by August 1 this year. The said date is two years ahead of their initial plan to seal the deal. According to the spokesperson of Volkswagen, Porsche SE will receive €4.460 billion ($5.580 billion dollars) plus one common share of VW.
“The accelerated integration will allow us to begin implementing a joint strategy for Porsche’s automotive business faster and key joint projects more quickly,” said VW chief financial officer, Hans Dieter Poetsch.
According to the company, the full consolidation of production operations of Porsche vehicles with Volkswagen will boost the latter’s financial results by more than €9 million. Additionally, the net liquidity will be cut by about €7 million.
Porsche and VW have pushed for a rapid integration of its automotive business to pave the way for cost savings at about € 700 million a year. This will allow the sports car manufacturer to clear about €200 million of debt.
VW acquired 49.9% of the Stuttgart-based manufacturer in December 2009 after a failed attempt on the part of Porsche to take control of its largest competitor. For months, both companies have explored on ways of avoiding taxes by up to €1.5 million in case of VW seals the purchase by August 2014.
Delivering a joint action to Porsche SE could classify the agreement as a restructuring under the so-called German tax law which will help VW to avoid paying tax.
“The acceleration of integration model has now been agreed can be implemented in terms economically viable,” VW said in a statement.
Porsche and Volkswagen agreed to a merger in August 2009 after the maker of the iconic 911 sports car has accumulated more than €10million in debt trying to buy VW.