Porsche and Lower Saxony both raise Volkswagen stakes
Porsche and the state of Lower Saxony fight for greater control of the Volkswagen company
Stuttgart -- Porsche and its rival, the German state of Lower Saxony, have both moved to enlarge their stakes in Volkswagen, leading the European Union to delay its verdict on Porsche's plan to take management control of the German carmaker.
Porsche, which has announced plans to ultimately acquire more than 50 percent, disclosed it had signed a contract to buy 4.92 percent of Volkswagen equity, but had not actually acquired the stock yet.
The move would lift Porsche's stake, now 31 percent, to more than 35 percent.
The European Commission said it was delaying its verdict on the takeover, originally due on Wednesday, till July 23rd, because Porsche had refiled its application.
Porsche, which says it needs to obtain merger clearance from 15 other regulators across the world, said it was under a duty to re-apply because of the latest purchase.
Lower Saxony disclosed on Wednesday that it had purchased 500,000 Volkswagen shares to ensure its shareholding in the state's biggest industrial enterprise remained above 20 percent.
At current market value, Lower Saxony would have needed to spend 90 million euros to do so.
The state, with Berlin's backing, insists that a 20 percent stake gives it veto rights at Volkswagen equivalent to the powers normally associated with 25 percent or more of equity under German company law. Porsche disagrees, citing EU law.
Lower Saxony said it was forced to act because its shareholding had been diluted by the issue of 3 million new Volkswagen shares to employees.