VW Completes Porsche Acquisition

This week Volkswagen AG bought the 50.1% of sports car maker Porsche AG it didn't already own, thus completing an acquisition of the fabled German brand that began seven years ago.

VW paid €4.5 billion ($5.5 billion) to Porsche Automobil Holding SE for the stake. It also transferred one of its shares to the holding company. The maneuver saved about $1.5 billion in taxes by allowing the transaction to be classified as a restructuring rather than takeover.

Porsche SE owns 50.7% of VW's common stock, which it acquired in between 2005 and 2008 in a failed attempt to seize control of the larger carmaker. The takeover was stalled by the $12 billion debt incurred by the holding company, which agreed instead to sell its carmaking unit to VW.

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

Porsche SE says it will use about $2.4 billion of the sales of its sports car brand to pay down bank debt. It plans to devote the balance to investments in the "automotive value chain."