By KATHARINA BECKER and WILLIAM LAUNDER
FRANKFURT — Volkswagen AG said Friday it would raise €4 billion ($5.7 billion) in capital to acquire a stake in the operating business of Porsche, as it fleshed out details of the highly indebted luxury sports-car maker’s merger with VW.
Volkswagen plans to acquire a 42% stake in Porsche AG, the sports-car arm and a 100% subsidiary of holding company Porsche Automobil Holding SE, for €3.3 billion by the end of 2009. A new name for the company created through the merger of Porsche and Volkswagen is yet to be decided, Volkswagen said.
Porsche said on Friday that Qatar Holding LLC will acquire 10% of the ordinary shares of the Porsche holding company from the family owners and the majority of Porsche’s cash-settled options on Volkswagen shares, freeing up more than €1 billion for Porsche that is currently serving as collateral for the options structure.
Volkswagen said it would raise $5.7 billion in capital to acquire a stake in the operating busines of Porsche
Porsche added it had already decided at the end of July to write down the value of the options structure by “a considerable amount” to prepare for such a sale and therefore no further write-downs would be necessary as a result of the deal.
If the combination with Volkswagen shouldn’t take place, Qatar Holding is entitled to resell its stake in Porsche SE to the families, it added.
Volkswagen shares closed Friday in Frankfurt at €192.50, down 16%. One trader said the news that Qatar will acquire the majority of Porsche’s VW options eased fears that the Volkswagen options would be thrown onto the market in a disruptive manner.
The two auto makers late Thursday said they reached a basic agreement to integrate Porsche into the Volkswagen, which is expected to be completed during 2011. The agreement concluded a failed attempt by Porsche to take over its larger rival, which backfired as the company incurred mounting debt and was forced into the hands of VW.
The takeover of Porsche will result in total synergies of around €3 billion, Volkswagen Chief Financial Officer Hans Dieter Pötsch said Friday.
Specifically, VW’s operating profit will likely increase by about €700 million each year through the synergies, Mr. Pötsch said. The synergies will include shared development and purchasing costs, shared manufacturing platforms and revenue from Porsche sales, he said.
—Erin Fines in Frankfurt contributed to this article.