Friday, June 23, 2006

Porsche to Increase Stake in Volkswagen

Text from The Associated Press.
FRANKFURT, Germany — Porsche AG said Friday it will purchase another 3.9 percent of Volkswagen AG, a move that would give it a blocking minority stake of 25.1 percent in Europe's biggest automaker.

The Stuttgart-based maker of luxury autos said it had filed a request for approval with Germany's Federal Cartel Office for the purchase. Holding a stake of more than 25 percent would put Porsche in a position to block corporate decisions by VW if it so desired.

Shares of Volkswagen rose by nearly 2.6 percent to euro54.28 ($68.29) in Frankfurt trading, whiles Porsche shares were up more than half a percent to euro752.37 ($946.63).

Porsche said it "anticipates that the Cartel Office will approve its plans without delay. Porsche would be able to implement the intended stock purchase as soon as approval is granted."

Porsche spent about euro3.5 billion ($4.4 billion) late last year to increase its stake in VW to 18.5 percent, making it that company's biggest single shareholder.

The move was aimed at protecting Volkswagen, a supplier for nearly a third of Porsche's production, from any hostile foreign takeover. Since then, Porsche's stake has grown to 21.2 percent.

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