Volkswagen Finalizes Porsche Acquisition

Volkswagen AG had acquired the 50.1% of sports car maker Porsche AG it doesn't already own, thus completing a convoluted seven-year saga in which VW went from being takeover target to acquirer.

VW paid €4.5 billion ($5.5 billion) and one of its shares to Porsche Automobil Holding SE for the stake. The transfer of a single share created a loophole that allowed VW to avoid a tax bill of as much as €1.2 billion ($1.5 billion) on the deal by classifying it as a restructuring rather than a takeover.

Porsche becomes the 12^th brand in VW's portfolio of car, motorcycle and heavy-truck marques. The auto giant predicts the latest acquisition will allow it to cut operating costs by €320 million ($393 million) per year.

Porsche SE owns 50.7% of VW's common stock, which it acquired between 2005 and 2008 in a failed attempt to seize control of the larger carmaker. The takeover was stalled by the more than €10 billion ($12.3 billion) debt the holding company incurred to buy the shares. Porsche SE agreed in 2009 to merge with VW, which bought a 49.9% stake in the sports car brand later that year.

Last year VW and Porsche SE scrapped plans to merge, so the latter remains an independent company, whose holdings include Porsche Design Group and several engineering and consulting firms.

Porsche SE says it will use about €2 billion ($2.4 billion) of the proceeds of the sale to fully repay its bank debt and devote the balance to investments in the "automotive value chain." The holding company expects to book a one-time €7 billion ($8.6 billion) gain on the transaction.