VW To Pay $5.6 Billion For Rest Of Porsche

Volkswagen AG (VOW) agreed to buy the 50.1 percent stake in Porsche SE’s automotive business that it doesn’t already own for 4.46 billion euros ($5.6 billion), ending a seven-year takeover saga that divided two of the most powerful families in Germany.

VW was able to proceed with the transaction two years earlier than planned after reaching an agreement with German tax authorities, it said late yesterday. The cash deal is based on an equity value of 3.88 billion euros and also includes what the Porsche holding company would have received in dividend payments and half of the forecast synergies from the combination.

A customer browses Porsche 911 automobiles on display outside a dealership in Stuttgart, Germany. Photographer: Guenter Schiffmann/Bloomberg

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July 5 (Bloomberg) -- Christoph Stuermer, an analyst at IHS Automotive, talks about the agreement which sees Volkswagen AG buy the 50.1 percent stake in Porsche SE’s automotive business that it doesn’t already own for 4.46 billion euros ($5.6 billion). He speaks from Frankfurt with Linzie Janis on Bloomberg Television's "On the Move." (Source: Bloomberg)

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June 25 (Bloomberg) -- Arndt Ellinghorst, an analyst at Credit Suisse Group AG, talks about Porsche SE's investment strategy and the outlook for the automotive industry. He speaks with Guy Johnson on Bloomberg Television's "The Pulse." (Source: Bloomberg)

VW Chief Executive Officer Martin Winterkorn said, “Combining their operating business will make Volkswagen and Porsche even stronger - both financially and strategically - going forward.” Photographer: Guenter Schiffmann/Bloomberg

The agreement means Wolfsburg, Germany-based VW can now fully fold the Porsche automaking business into its stable of 12 brands, which range from Audi luxury sedans to Ducati motorbikes. The purchase helps VW Chief Executive Officer Martin Winterkorn in his quest to pass Toyota Motor Corp. and General Motors Co. and become the world’s largest automaker by 2018.

“It’s very positive for VW as they get 50 percent of an asset they value at 26 billion euros on their own books for 4.46 billion euros,” said Erich Hauser, a Credit Suisse analyst in London. “If I was a Porsche shareholder, I’d feel slightly short changed though.”

VW gained as much as 8.20 euros, or 6.4 percent, to 136.20 euros and was up 6.1 percent as of 11:51 a.m. in Frankfurt trading. The shares have climbed 17 percent this year, valuing the carmaker at 60.7 billion euros. The Porsche SE (PAH3)holding company’s stock fell as much as 1 percent and was down 0.5 percent to 41.81 euros, giving it a market value of 12.8 billion euros.

Failed Takeover

The two companies agreed to combine in 2009 after Stuttgart-based Porsche racked up more than 10 billion euros of debt in an unsuccessful attempt to take over Europe’s largest carmaker. VW said it expects Porsche’s automaking business, which it values at more than 20 billion euros, to be fully consolidated in its accounts from Aug. 1.

“Porsche and Volkswagen belong together,” Winterkorn said at a press conference today at VW headquarters in Wolfsburg. “By working with one another we will raise the company to a new level. We are on the way to being number one.”

Porsche’s earnings contribution for this year will be mainly offset by the purchase price, VW said. By revaluing its existing shares in Porsche, VW expects to book a non-cash gain of more than 9 billion euros and predicts a liquidity drain on its own automaking division of about 7 billion euros. The agreement will result in 320 million euros in additional synergies due to the earlier completion.

Lower Tax Bill

Volkswagen is paying the purchase price, plus transferring one share to Porsche, in a move that allows the carmaker to classify the merger as a restructuring rather than a takeover. Doing so means VW avoids a possible tax bill on the purchase of about 1 billion euros that it might have had to pay by completing the merger before 2014. The agreement with tax authorities has been criticized by some German politicians.

VW will now pay “well over” 100 million euros in transaction taxes on this deal, Chief Financial Officer Hans Dieter Poetsch told reporters at the press conference.

The agreement simplifies the cross-shareholdings between the companies by leaving the Porsche SE holding company as the largest stakeholder in VW, with 50.7 percent of the common stock, and at the same time folding the Porsche automaking operations fully into the VW group. The holding company plans to use proceeds of about 2.4 billion euros from the sale to invest in materials for the auto industry, real estate and energy trading.

Porsche Lawsuits

The two companies had been working on a full-blown merger since 2009, when Porsche failed in its attempt to take over VW, which would have eliminated the holding company and given Porsche shareholders a direct interest in VW. That goal was scrapped in September because of the lawsuits in the U.S. and Germany, claiming the carmaker secretly piled up VW shares.

After Porsche announced in 2008 that it controlled 74.1 percent of VW, partly through options, and was seeking an eventual takeover, the shares surged as short sellers raced to buy shares borrowed in a bet that VW would fall. Porsche has repeatedly denied any wrongdoing.

“We have to reckon that the situation with legal proceedings will persist for a while,” Poetsch, who is also the Porsche holding company’s CFO, said today. “There is no contractual ground for a full merger today. The transaction structure makes sure that the risks for the lawsuits are clearly on the Porsche SE side.”

Family Feud

Porsche’s attempt starting in 2005 to take over Volkswagen, which makes more cars in a week than the sports-car maker does in a year, split the controlling family. Ferdinand Piech, VW’s chairman, crossed his cousin Wolfgang Porsche to thwart the plan, which ultimately fell apart after Porsche’s debt rose in the midst of the financial crisis.

“VW and Porsche will be able to better cooperate in the future, devise a common strategy and reap synergies,” Lower Saxony Prime Minister David McAllister said today. Lower Saxony is the second-largest VW shareholder with a 20 percent stake.

Piech, 75, the former VW CEO who was elected to a third term as chairman in April, has since solidified control of Volkswagen. His wife, Ursula, took a seat on the company’s supervisory board earlier this year. In April, VW agreed to acquire Italian motorcycle maker Ducati, fulfilling Piech’s vision of a company with a range spanning two-wheelers to 50-ton trucks. VW also controls truck makers MAN SE (MAN) and Scania AB. (SCVB)

“To have the Porsche clan as owners and the anchor shareholder is good for Volkswagen and for Germany,” said Christoph Stuermer, an IHS Automotive analyst in Frankfurt. “This has changed the cultural heart of the company. Volkswagen has become substantially stronger and long-term oriented.”

Rolls Royce's New Starliner Features Starlit Ceiling

Stars in your car.

No, not celebrities, and not a new moon-roof, but literally, starlight in the ceiling brought to life by fiber optic lights adorn Rolls Royce's newest car.

So question is, moon-roof, or electronically starlit roof?

2013 Pagani Huayra first drive

It's tempting to dismiss the Pagani Huayra as another fringe hypercar -- another exclusive, expensive, pointless toy for the collector who's bored with his Ferraris and wants to tool around to the country club in something his rich buddies don't have. Tempting, that is, until you drive it.

The Huayra is the follow-up to the Zonda, the debut model from self-taught supercar auteur Horacio Pagani. It features an all-new chassis with a central monocoque made from titanium-infused carbon fiber, and the wheelbase has been stretched 2.75 inches over the Zonda. The suspension is pure race car stuff: double wishbones milled from billets of a copper-rich aluminum alloy called Avional, with pushrod-actuated Ohlins shocks.

The carbon bodywork was styled by Pagani himself, and features active aerodynamics -- flaps at each corner of the car that can move independently and alter downforce according to inputs from sensors that measure speed, lateral and longitudinal acceleration, roll, and steering angle. The suspension will also automatically lower the nose to increase the car's angle of attack and increase downforce at speed.

Here's the simple math: The Huayra weighs less than 3000 pounds (dry) and has 720 horsepower. Oh, and it also has more than 737 lb-ft of torque, courtesy of a new 60-degree, 6.0-liter twin-turbo V-12 developed expressly for the car by the engine wizards at AMG, replacing the 7.3-liter naturally aspirated AMG V-12 in the Zonda. The mid-mounted engine drives the rear wheels through a seven-speed, single clutch automated manual transmission built by Xtrac, the British company that makes trannys for F1 cars and Le Mans prototypes.

There was some wrangling over the new engine's configuration. Horacio Pagani didn't like the idea of turbos, and didn't like the naturally aspirated V-8 AMG first proposed as a replacement for the Zonda's 7.3. He wanted a V-12, but AMG engineers were insistent that to meet emissions and fuel consumption standards through the next decade, the engine had to have forced induction. AMG clearly knew what it was talking about. At cruising speeds, the Huayra is one of the most fuel-efficient supercars in the business, says Pagani, brandishing figures fresh from the test lab showing it has achieved 21 mpg (U.S.) on the Euro highway cycle.

Nailing the gas in the Huayra is like lighting the afterburners on an F-15, though. The new V-12, codenamed M158 in AMG-speak, will pull cleanly and smoothly from as little as 1000 rpm, but once the tach needle swings past the 2500 mark and the turbos get into their comfort zone, the thrust is epic and utterly relentless all the way to 6000 rpm. I didn't go past 160 mph more than once on the bumpy, busy autostrada near Bologna, but the Huayra got there without breaking sweat; a casual canter en route to its claimed 230 mph top speed.

More impressive than the Huayra's raw speed on the autostrada, however, is its agility on the winding two-lanes. This is a big car -- 181.2 inches long and 80.2 inches wide, rolling on a 110.2-inch wheelbase -- but its low mass -- it weighs about 200 pounds less than a Ferrari 458 Italia, and a whopping 1300 pounds less than a Bugatti Veyron -- means it darts and weaves through the twisties like Jerry Rice on a crossing route. Factor in that weapons-grade torque and a complete absence of turbo-lag, and the Huayra will destroy a canyon road using only second and third gears.

Which is just as well, because the seven-speed automated manual transmission is the car's weakest link. Sure, it's light -- at 211 pounds, the single-clutch unit is less than half the weight of the 458 Italia's dual-clutch 'box -- and the F1-style transverse gearset keeps most of the transmission's mass inside the wheelbase, but the speed and finesse of its shifts are nowhere near as good as those of the Ferrari. It feels like a first-gen Lamborghini automated manual -- slow and clumsy in auto mode, thumpingly brutal in manual mode if you keep your foot on the gas through the shifts.


The Huayra's steering isn't quite as tactile as that of the Zonda, but that's because Pagani has deliberately dialed some snooze factor into the chassis in recognition of the way most Huayra owners will actually drive the cars. When pushed hard into turns, the Huayra will eventually develop mild understeer, which Horacio Pagani prefers to the snap oversteer that usually bedevils mid-engine supercars at the limit. "It's safer," he says simply. The brakes, monster carbon-ceramic units developed in partnership with Brembo, are stellar. You can grenade the pedal time after time, and they just keep coming back for more.

Our tester was running on the standard P Zero tires specially developed for the Huayra by Pirelli. The optional P Zero Corsas have proven 20 percent faster on the track, says Pagani, but are 10 percent less efficient in the wet. If I had the money for a Huayra, I'd probably opt for the Corsas to give the car a touch more front end bite on initial turn in, and drive my Bentley Conti GT on rainy days.

Our tester was also only the fifth Huayra ever built. The Pagani shop is tiny and it's production methods artisanal, so development is ongoing. Andrea Galletti, who spent 10 years working for the Ferrari F1 team and helped develop the 599XX, said the variable front ride height settings will be changed to alter the car's angle of attack and improve stability at speed (I mentioned I had been chasing the front end around more than I had expected above 140 mph on the rough autostrada), and that anti-roll bar settings would also be changed to improve initial turn-in response.

A sport + mode is also being developed that will lower the car 10mm, eliminate the auto upshift (which currently happens when you hit the redline in either comfort or sport manual mode), and switch off both traction control and ABS. Galletti also acknowledged that for the typical Huayra customer -- someone who collects supercars and might drive them fast only occasionally -- the transmission needs work to improve comfort and response, particularly when the Huayra is being cruised around town. Among the changes under discussion is a shorter first gear so the engine doesn't rev as high before the clutch engages from a standstill.

Pagani currently holds 14 orders for the Huayra from U.S. customers (out of a total of 95 worldwide), its million dollar-plus price tag notwithstanding. U.S. market homologation, which includes the adoption of two-stage airbags, is expected to be completed by the end of this year, and the first U.S. spec Huayra is expected to be delivered by mid-2013. (The carbon/titanium central tub is so strong it has been used in seven crash tests so far, says Pagani proudly. They simply removed the buckled front and rear subframes after each test, and bolted on new ones.)

Before I drove my first Pagani 10 years ago, an early Zonda, I was a skeptic. I had expected a glorified kit car -- fast, but half-baked. I was surprised at how complete the Zonda felt. It drove and rode and steered like a real car developed by a real car company with thousands of engineers and a basement full of Cray supercomputers at its disposal. The Huayra is no different. Pagani may be tiny -- just 53 people work at the factory at San Cesario sul Panaro, just outside Modena -- but the Huayra is a real car. It has air conditioning and sat-nav and a stereo, all the mod-cons you'd expect in a modern supercar. It's a car in which you could comfortably knock off 1000 miles a day, and feel fresh enough for a chilled Dom Perignon before dinner.

But that's not what makes the Pagani Huayra special. What makes it special is that it's the singular product of one man's singular passion. "We are a design and research company based on the Renaissance theory of art and science working together," says Argentine-born Horacio Pagani. "That's not our idea -- it's 500 years old. We take our inspiration from Leonardo da Vinci." Pagani has thought through every single detail of this car -- his one-on-one walkthrough of the Huayra's technical highlights lasted more than three hours. He is truly autodom's Renaissance man (he named his first son Leonardo): part designer, part engineer, mostly self-taught, totally obsessed.

How else could you explain the fact that every one of the Huayra's 1400 titanium bolts has the Pagani logo etched on it (the pre-production bolt set used on the first five cars cost $112,000 -- per car); that Pagani spent nearly $900,000 developing a unique fuel system designed to eliminate the threat of fires in a crash; that the Huayra has a bespoke battery that's 26 pounds lighter than the one used in the Zonda (the old one cost $125, the new one is more than $1800). There are 1001 other examples I could quote, so just take it from me: The Huayra's detailing and workmanship is simply incredible. It makes a Ferrari look frumpy, a Veyron like a Volkswagen.

A Pagani is more than just a car. It is a rolling work of art, painstakingly created and beautifully rendered. Some Zonda models are now worth considerably more than what their owners paid for them, which perhaps proves the point that great art always goes up in value. But driving the Huayra is a lot more fun than looking at a painting on the wall.

24 Hours of Le Mans

The 24 Hours of Le Mans (French: 24 Heures du Mans) is the world's oldest active sports car race in endurance racing, held annually since1923 near the town of Le Mans, France. Commonly known as the Grand Prix of Endurance and Efficiency, race teams have to balance speed against the cars' ability to run for 24 hours without sustaining mechanical damage to the car and manage the cars' consumables, primarily fuel, tyres and braking materials. The endurance of the drivers is likewise tested as drivers frequently spend stints of over two hours behind the wheel before stopping in the pits and allowing a relief driver to take over the driving duties. Drivers then grab what food and rest they can before returning to drive another stint. Today it is mandated that three drivers share each competing vehicle.

The race is organised by the Automobile Club de l'Ouest (ACO) and runs on the Circuit de la Sarthe, a circuit containing a mix of closed public roads and specialist motor racing circuit that are meant not only to test a car and driver's ability to be quick, but also to last over a 24 hour period. The competing teams will race in groups called classes for cars of similar specification while at the same time competing for outright placing amongst all of the classes. Originally, the race was held for cars as they were sold to the general public which were then called Sports Cars compared to the specialist racing cars used in Grands Prix. Over time, the competing vehicles evolved away from their publicly-available road car roots and today, the race is made of two classes specialised enclosed-bodywork two-seat Prototype sports cars and two classes of Grand Touring cars which bear much closer resemblance to high performance sports cars as sold to the public.

Competing teams have had a wide variety of organisation, ranging from competition departments of road car manufacturers who are eager to prove the supremacy of their products, to professional motor racing teams who represent their commercial backers, some of which are also road car manufacturers attempting to win without the expense of setting up their own teams, to amateur race teams, racing as much to compete in the famous race as to claim victory for their commercial partners.

The race has over the years inspired imitating races all over the globe, popularising the 24-hour format at places like Daytona, Nurburgring, Spa-Francorchamps, Sebring and Mount Panorama. Presently, the American Le Mans Series and the European based Le Mans Series of multi-event sports car championships have been spun off from 24 Hours of Le Mans regulations. Other races include the Le Mans Classic, a race for historic Le Mans race cars of years past held on the Circuit de la Sarthe, a motorcycle version of the race which is held on the shortened Bugatti version of the same circuit, a kart race (24 Heures Karting) and a truck race (24 Heures Camions).

The race is held near the height of the European summer in June, leading at times to very hot weather conditions for the drivers, particularly in closed roof vehicles whose cabins can heat up to uncomfortably hot temperatures with generally poor ventilation; rain, however, is not uncommon. The race begins in mid-afternoon, racing through the night and following morning before finishing at the same time the race started, the following day. Over the 24 hour period modern competitors will complete race distances well over 5,000 km (3,110 mi). The present record is 5,410 km (3,360 mi), recorded in the 2010 race.  It is a distance over six times longer than the Indianapolis 500, or approximately 18 times longer than a Formula OneGrand Prix.

The race has also spent long periods as a round of the World Sportscar Championship, although Le Mans has always had a stronger reputation than the World Championship, and is presently a round of the FIA World Endurance Championship. The race is also known as a leg of the informal Triple Crown of Motorsport which links Formula One, IndyCars and Sports Car racing to represent a career achievement for drivers. Additionally, it is seen as a leg of Triple Crown of endurance racing, which links the three largest sports car races together with 12 Hours of Sebring and 24 Hours of Daytona forming the other legs.

Merc reveals details on new A45 AMG

TrifectaWheels gets a sneak peek at the upcoming 330bhp baby AMG coming soon...

Is AMG the ultimate automotive skunkworks? Back in the day, perhaps. Now, exactly 45 years after the outfit was founded by just two men in a big shed, it's a 1000 employee-strong pillar of the Mercedes empire, the one whose signature eight-cylinder engines emit the most famously thunderous noise in the business. It's even part of the Mercedes F1 team, underlining its strategic importance to the company.

All of which makes the confirmation of its smallest, most affordable model ever, the A45 AMG - which we first told you about last year - equal parts exciting and, for purists, a tad worrying. Rest easy, V8 fans. In a ridiculously early anniversary preview, TG.com has seen the new car, and although it's powered by a heavily revised version of the 2.0-litre turbo four that lesser A classes will use, AMG's big guns assured us that the A45 will a) have the highest specific output of ANY car, eclipsing even the McLaren 12C, which points to around 330bhp b) more than 300lb ft of torques and c) will sound ruddy marvellous, despite its cylinder deficit. Over to Fritz Eichler, AMG's head of powertrain. ‘The sound our cars make is hugely important, we know that. Which is why I've said to my guys, "I want this thing to sound like a Rory Gallagher guitar solo".' This is our sort of analogy.

With the Golf R, Audi RS3 and BMW 1 M Coupe firmly in its sights, the A45 AMG uses a Haldex-style all-wheel drive set-up with a multi-plate clutch. AMG's head of development Tobias Moers confirmed that the variable torque split is 60/40 front-to-rear, with similar overall weight distribution. ‘OK, you can't exactly drift it, but believe me it has a very positive front end. It does not know the meaning of understeer... Can you get it sideways? Yes, in Sweden!' Moers says.

Weighing under 1500kg and using a new seven-speed dual shift gearbox - ‘there's no need for a manual gearbox, it's just a romantic notion,' Moers says bluntly - he also confirmed that AMG has been involved with the A-class's chassis set-up pretty much since day one. The suspension - McPherson struts upfront with a multi-link rear - has bespoke springs and dampers, completely revised kinematic properties, and a bigger anti-roll bar. The brakes are Brembos, with 350mm discs upfront, and four caliper pistons.

It also looks effing fantastic. We saw two versions, one in a surprisingly effective mustard yellow, the other in full GT3 semi-race car spec, complete with stripes, huge roof spoiler, roll cage and junked rear seats. All A45's will get AMG's all-new ‘performance' seats, and the interior trim and overall quality are both better than its rivals'. There's even a carbon fibre/Alcantara blend across the dash and on the doors. This is a Mercedes with an almost Italianate flair.

The A45 is due to land at next year's Geneva show, with UK deliveries starting in the autumn. So brace yourself for a lengthy wait. Alternatively, start saving. AMG says the price will be ‘attractive' - with an RS3 starting at £39,995, we reckon between £35k and £40k. Named after the Coventry ring road it may be, but prepare to want an AMG with half the cylinders it should have.

Lamborghini Aventador J

This is not a concept car. We repeat, this is not a concept car, It is Real & Lambo have gone Bonkers

Six months after unveiling the Aventador,  Lamborghini officially unveiled the Aventador J to the world at the 2012 Geneva Motor Show. It's one thing to create a convertible version of the gorgeous Lamborghini Aventador LP700-4, it's another thing to take off the roof and the windscreen, fitting two small wind deflectors in front of the driver and passenger compartments. Climate control? Gone. Navigation/infotainment system? Forget it.

What you do get, however, is what Lamborghini calls "an utterly indescribable experience of power and dynamics." The J Roadster uses the same 700-horsepower, 6.5-liter V12 as its hardtop kin, and Lamborghini states that the open-air J will hit speeds as high as 186 miles per hour. In an effort to save weight even further, the automaker has used a new carbon fiber fabric called "Carbonskin" that is apparently soft and supple enough to be used on the seats and interior trim. Regardless, we're sure that once you're actually driving this beast at speed, you won't really care how good the fabric under your butt is.

let's get back to that whole "not a concept car" thing. The J Roadster you see here is for sale. How many more will be produced? None. It's a one-off, one-run deal, and put away your pocketbooks – it's already been sold for a cool 2.1 million euros or $2.8 million

Mercedes reveals SLS AMG GT

Faster, harder and betterer; this is the new and only version of the Big Bad Merc

And there you were, smugly believing the Mercedes Benz SLS AMG was as powerful as it could be. Ha! This is the new Mercedes Benz SLS AMG, and it is more powerful.

This revised 'GT' version of Mercedes' flagship car - which is now the only SLS you can actually buy -generates 591hp, 479lb ft of torque and a 0-62mph time of 3.7 seconds; an entire tenth of a second quicker than its ageing, underpowered, dowdy, predecessor.

AMG engineers have squeezed out the additional 20hp through in-engine dethrottling measures and an increase in peak pressure, while the seven-speed sports auto ‘box gets newly developed gear change functions in manual ‘M' mode. Oh, and this mode gets more engine torque making the shifts even quicker, which are accompanied by "some passionate acoustic feedback for the driver".This could get noisy...

Elsewhere, deep inside the barking heart of the SLS AMG GT lurks a revised AMG ride control sports suspension: stiffer springs and dampers meet twin aluminium wishbones all round, while the ‘comfort' mode has been binned. ‘Sport', says Merc, is acceptable for say, some rural roads or "the legendary North Loop of the Nürburgring", while ‘Sport Plus' helps you achieve "ambitious lap times" on a circuit. Quite.

The seats have an embossed badge on the headrests, there's Alcantara, contrast stitching and a high-gloss black trim on the door panels and centre console. Prices start at €204,680 ( N41,463,961.39 ) for the GT coupe, rising to €213,010 ( N43,151,448.19 ) for the GT Roadster. Gullwing or drop-top? And, looking into our pool of wishful thinking, if/when they build an SLS AMG GT Black Series, what kind of firepower will that be packing?