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mass-market rival Volkswagen by axing its chief executive and said it
would raise at least 5 billion euros in equity as the two prepared for a
merger. After an all-night meeting of its board of directors, Porsche said
Wendelin Wiedeking, Germany's best-paid executive and its CEO for the past
16 years, along with finance chief Holger Haerter, would quit the group
immediately. Their hasty exit will be sweetened by payoffs of 50 million
euros and 12.5 million euros, respectively. Wiedeking, who had opposed
selling Porsche to Volkswagen, which would have helped the company reduce
the debt he had run up in a botched attempt to take over VW, will be
succeeded by Porsche's production head Michael Macht, the board said in a
statement early on Thursday. The meeting of the non-executive directors,
which include the Piech and Porsche families that between them control
Porsche, approved Wiedeking's proposal to raise fresh equity -- either in
cash or through a contribution in kind -- and endorsed talks to sell a
stake to the Gulf state of Qatar. "This should lay the foundations for the
creation of an integrated automobile group consisting of Porsche SE and
Volkswagen," Porsche said. It was unclear from Porsche's statement who
would contribute to the capital increase and whether it would be taken up
by Qatar. A Porsche spokesman declined to comment further. The board's
unanimous approval signals that the powerful Porsche and Piech clans may be
open to surrendering some of their influence at the maker of the 911
sports coupe. Between them they control 100 percent of Porsche's voting
shares and have resisted selling a stake to an outsider. At 0820 GMT,
Porsche shares were up 1 percent, while Volkswagen's were down around 3
percent, compared with a 0.8 percent fall in the DJ Stoxx auto index and a
flat German market. JOINING FORCES A source at Volkswagen, speaking on
condition of anonymity, told Reuters it was still open whether oil-rich
Qatar would take a stake in the Porsche SE holding company or directly in
Volkswagen, or in both groups. The issue was due to be discussed by
Volkswagen's own board of directors, which gathers for an extraordinary
session on Thursday in Stuttgart, where Porsche's Zuffenhausen
headquarters are based, rather than its own headquarters in Wolfsburg.
Volkswagen, Europe's biggest carmaker, declined to comment. The moves
came as Porsche enters the final stretch of negotiations with Volkswagen to
create what both sides have called an " integrated" auto group, in which
Porsche would essentially become the 10 th brand in Volkswagen's sweeping
automotive empire. Porsche SE, the holding company that controls sportscar
maker Porsche AG, needs to bolster its finances after accumulating more
than 10 billion euros in debt through its botched attempt to seize control
of VW. Porsche was forced to abandon attempts to win control over 75
percent of VW, leaving it with a stake of nearly 51 percent. The failed
takeover attempt opened the door to Ferdinand Piech, VW's powerful
chairman and himself a part-owner of Porsche, to turn the tables on
Porsche. The Porsche and Piech families had been at loggerheads for months
over how to resolve the company's debt woes and the role VW would play.
Piech has pushed for VW to take over Porsche, on condition that Porsche
fixes its finances first.
