Volkswagen's Ferdinand Piech's Porsche Connections: The Clash of Interests?



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Code : GOV0023

Year :
2006

Industry : Automobile

Region : Germany

Teaching Note: Not Available

Structured Assignment : Not Available

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Abstract: German carmakers, Porsche and Volkswagen, have enjoyed a long history of close alliances and have collaborated on various projects. Volkswagen supplies about 30% of the automobile parts Porsche uses. But when the luxury sports carmaker, Porsche acquired 20% stake in mass-market carmaker Volkswagen, it created apprehensions in the minds of shareholders of both the companies. Porsche's investors were apprehensive about the deal that ties Porsche to a company, which has been struggling financially. On the other hand, Volkswagen shareholders worried about the delay in the company's restructuring process and future of the company. In question was the role of Volkswagen's non-executive chairman, Ferdinand Pich, who also happens to be the grandson of Ferdinand Porsche (founder of Porsche) and a major shareholder of Porsche

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Pedagogical Objectives:

  • To understand the clash of interests involved in the Porsche - Volkswagen, which has triggered a crisis in German corporate governance
  • To discuss the future of the Porsche - Volkswagen deal.

    Keywords :Corporate Governance Case Study, Porsche, Volkswagen, Ferdinand Piech, Clash of interests, Corporate governance, Shareholder value, Luxury sports carmaker, Mass-market carmaker, Price-earnings ratio, Restructuring, Volkswagen law

    Contents :
    » The Clash of Interests?


    Case Introduction >>


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