VW's Winterkorn Appointed Porsche CEO

Following the agreement between the two German brands, Volkswagen's Martin Winterkorn will serve as Porsche CEO starting from September 15, 2009. The news was confirmed by both Porsche and Volkswagen who also revealed that Dieter Potsch will be appointed CFO of the company at the same date. Additionally, Michael Macht, who is also a member of the Board of Management of Porsche SE, shall be appointed into the top management of Volkswagen AG, in order to represent the Porsche brand there, Porsche said in a release.

Thomas Edig, deputy chairman of Porsche AG, is a further member of Porsche SE’s Board of Management with responsibility for administration.

Just as we told you yesterday, Volkswagen and Porsche will form an integrated car group, with the Basic Agreement including the following steps (as provided by Porsche):

• Shareholding of 42% of Volkswagen in Dr. Ing. h.c. F. Porsche AG, the 100% subsidiary of Porsche SE. The shareholding will be provided by way of a cash capital increase with an expected total return of approximately up to 3,3 bn. EUR based on an enterprise value of Porsche AG of 12,4 bn. EUR.
• A cash capital increase of Volkswagen AG taking place in the first half-year of 2010 against issuance of new preference shares. The capital increase will be approved by Porsche SE.
• Volkswagen grants an option to the shareholders of Porsche Gesellschaft m.b.H., Salzburg, to sell the operative sales and distribution business of the company to Volkswagen.
• Cash capital increase of Porsche SE most probably taking place in the first half-year of 2011 against issuance of new ordinary and preference shares, granting preemptive rights for ordinary shareholders on ordinary and preemptive rights for preference shareholders on preference shares. The ordinary shareholders of Porsche SE will approve the capital increase.
• Agreement that, until 2020, Porsche SE will not enter into a domination and profit and loss transfer agreement with Volkswagen AG.
• Joint purpose of a merger of Porsche SE into Volkswagen AG during 2011, if at that time the legal requirements for a merger are met.
• If a merger will not take place: put option for Porsche SE and call option for Volkswagen AG to sell and to purchase, respectively, the remaining shareholding of Porsche SE in Porsche AG; the purchase price is calculated according to the same parameters as applied for the valuation of Porsche SE for purposes of the capital increase.

Last but not least, Volkswagen will be proposed a number of changes, including the State of Lower Saxony to be entitled as shareholder of the company and appoint two members of the supervisory board.