Volkswagen to buy Porsche factories only, rebuffs Suzuki

Sep 13, 2011, 12:06 GMT

Frankfurt - Volkswagen is to take ownership of Porsche's car factories only instead of the full Porsche parent company after being scared off a full-scale merger plan by massive financial risks, an executive said in Frankfurt Tuesday.

Volkswagen at the same time re-affirmed it would keep one fifth of Suzuki, rejecting an appeal for a divorce from the Japanese maker.

Porsche chief executive Matthias Mueller told reporters in Frankfurt before the opening of that city's car show that Europe's biggest car group was 'likely' to exercise its existing options to purchase Porsche AG after they fall due at the end of next year.

AG, which designs and makes sports and luxury cars, is jointly owned by its parent Porsche SE and Volkswagen.

Last week Volkswagen called off plans to formally merge with the SE parent this year because of the risk that SE may have to pay massive fines and damages for a stockmarket skirmish in 2009.

The delay had cast a shadow over Volkswagen's ambitious plan to become the world's biggest automotive group.

Volkswagen chief executive Martin Winterkorn said the wind was now behind the plan to take over the Porsche AG subsidiary, adding, 'Believe me, it'll turn out fine.'

Winterkorn surrendered no ground on Suzuki's request Monday to undo interlocking shareholdings.

'If Suzuki believes it has to separate from us, then I'll bear it in mind,' he said. 'We are the biggest shareholder in Suzuki. Why should we change that?' Winterkorn accused Suzuki of breaching agreements, but said this had no implications for VW's ownership.

If Suzuki were to decide to sell its 1.5-per-cent stake in Volkswagen AG, 'that's got nothing to do with VW,' he added.

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