Porsche's VW Deal Put on Hold

Last week, Porsche SE announced that it intends to take full control of German carmaker Volkswagen by increasing its stake from 42.6 percent to 75 percent, a move that turned VW into the most valuable company in the world. But even so, Porsche's VW acquisition may be blocked by some unexpected factors, wheels24 announced in its online edition today. The German state of Lower Saxony wants to block Porsche from taking full control over Volkswagen by “making use of its blocking minority,” the aforementioned source said quoting state Premier Christian Wulff.

In fact, the state wants to maintain Volkswagen's independence on the German stock market index and is willing to take advantage of its 20 percent voting stake to block the deal from going further.

"Lower Saxony wants to keep the independence of VW in the DAX index on the bourse and in Wolfsburg ... as headquarters of the company. There will be no domination agreement with us. We will prevent it with our blocking minority,” Premier Christian Wulff was quoted as saying by the same source mentioned above.

Even if Lower Saxony aims to block the deal, the state and the car manufacturer are currently involved in a legal dispute, with Porsche pointing to a European Court of Justice ruling “against the blocking monitory clause which already renders the state's position illegal,” as wheels24 added.

Back in October, Porsche announced its plans to raise its Volkswagen stake from 42.6 percent to a total holding of 75 percent which could bring Porsche full control over the German carmaker and, more importantly, would eliminate short selling, as Porsche finance chief Holger Haerter said.