BREAKING: Volkswagen Law struck down by European Court
Posted by Lorenzo at 5:50 pm
Porsche is one step closer to owning controlling stake in Volkswagen today as the European Court of Justice brought down the highly contentious Volkswagen Law. The law stipulates that any shareholder cannot excercise more than 20% of its voting rights regardless of how much stake it holds in Volkswagen. that German and Lower Saxony are each entitled to appoint two members on the Supervisory Board, and that the majority required to pass a resolution is more than 80%. The law was enacted in order to protect Volkswagen from hostile takeovers by foreign investors.
As it stands, the State of Lower Saxony and Porsche both hold 20% and 31% stake in Volkswagen, respectively, so with or without the Volkswagen Law, Volkswagen should be safe from any takeover (as it is in the best interests of all parties involved to keep Volkswagen German-owned). But now, with the Volkswagen Law overturned, Porsche can now exercise the full power of its voting rights.
Porsche, obviously, has welcomed the decision. Their official line right now is that they're happy that they are now "in a position, as Volkswagen's largest shareholder, to fully exercise [Porsche's] voting rights". No mention however, of a takeover just yet. Porsche is playing this slow as there are other things to consider. They are not expected to raise its stake before the end of the year, and when they do, they will be doing it in small increments.
Source: New York Times
As it stands, the State of Lower Saxony and Porsche both hold 20% and 31% stake in Volkswagen, respectively, so with or without the Volkswagen Law, Volkswagen should be safe from any takeover (as it is in the best interests of all parties involved to keep Volkswagen German-owned). But now, with the Volkswagen Law overturned, Porsche can now exercise the full power of its voting rights.
Porsche, obviously, has welcomed the decision. Their official line right now is that they're happy that they are now "in a position, as Volkswagen's largest shareholder, to fully exercise [Porsche's] voting rights". No mention however, of a takeover just yet. Porsche is playing this slow as there are other things to consider. They are not expected to raise its stake before the end of the year, and when they do, they will be doing it in small increments.
Source: New York Times
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