(autoinsidernews) - Last year, Porsche paid $4.2 billion to become the biggest shareholder in Volkswagen, and in July, Porsche received approval from German antitrust authorities to increase its stake to 25.1 percent from 21.2 percent. While the German state of Lower Saxony only holds 20.75 percent, it has a bigger say in VW because of the so-called Volkswagen law, which prevents any shareholder but the state from exercising more than 20 percent of its voting rights, reports Trend.
If Porsche increased its stake to 25.1 percent, Porsche would have a blocking minority and in effect control the company, but only if the VW law is repealed. A European Commission lawsuit is challenging the law but repealing it could leave VW open to a hostile takeover, which is exactly what Porsche said it wanted to prevent when buying its stake. Volkswagens stability is extremely important to the stability of Porsche since VW manufactures body shells for the Cayenne, and will do the same for Porsches forthcoming Panamera. The VW law would be unnecessary with Porsches expanded stake and would only limit the automaker from having a greater influence over VW.
Porsches chief executive, Wendelin Wiedeking, has begun maneuvering for greater control of Volkswagen and recently said, We want to take full advantage of our rights as a shareholder. Now Wiedeking would like to get in on the European Commission lawsuit. While the lawsuit is not open to outside parties, Wiedeking is launching a debate about the Volkswagens future after the VW law is repealed, which most legal experts expect to happen, and positioning Porsche as VWs white knight preventing a hostile takeover and speeding up its restructuring.