Reply To: Takeover Strategy When Smaller Companies attempt to to acquire larger competitor

#37374
Silman Ondrej Dia
Participant

Hi there,
In reference to Porsche’s attempt to take over Volkswagen I believe it was overall a very cleaver plan* for a hostile takeover put in place by Wendelin Wiedeking CEO & Holger Härter CFO, which would have surely worked if the 2008 financial crisis didn’t happen. The credit crunch prevented Porsche to reach the 75% mark, which under German law would have given them full control over the company and access its cash flow, which was “the true essence of deal: domination and profit transfer.” Porsche was just 0,9% short of reaching they goal!
Timing was the main reason they didn’t achieve the hostile takeover, and perhaps the only thing they should have done differently was to have a contingency plan against a financial crisis! Tough luck.

* The plan consisted of purchasing VW stocks including the use of call options. In turn the profits generated by such operation financed the actual share purchase.

Reference:
https://www.automobilemag.com/news/porsche-and-volkswagen-what-happened/
https://www.spiegel.de/international/business/david-to-merge-with-goliath-porsche-fails-to-swallow-vw-a-623423.html
https://www.ft.com/content/ad782326-ed02-11e5-888e-2eadd5fbc4a4

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