VW Closing Purchase of Porsche. Still Eyeing Alfa-Romeo
And VW AG supervisory board chairman, billionaire Ferdinand Piech (grandson of Porsche founder Ferdinand Porsche) isn't through trying to add premium and luxury brands. At the Geneva Motor Show this week Piech reiterated his interest in acquiring Italian brand Alfa Romeo, owned by Fiat, despite public statements by Fiat CEO Sergio Marchionne that the marque is not for sale.
Piech, a forceful figure in European business, appears to be trying to pressure Marchionne to sell Alfa, which has long lost money for Fiat, by making sure all the industry analysts and institutional investors holding Fiat shares, not to mention Fiat's bankers, know that he is willing, anxious and ready to take it off Fiat's hands. Marchionne has been streamlining Alfa's operation, reducing product development costs and plans to re-introduce the brand to the U.S. next year.
With regard to the Porsche deal, it wasn't so long ago that the shoe was supposed to be on the other foot. In 2008, Porsche AG was engineering a takeover of VW in a case of the mouse trying to swallow the cat. But when the worldwide credit markets went into free-fall, it exposed a risky and complex set of investments the German automaker had made to try and finance the deal.
When the house-of-cards collapsed, Porsche CEO Wendelin Wiedeking was ousted and VW was compelled to rescue Porsche by taking it over. The deal was facilitated in part because of Ferdinand Piech's dual role as VW board chairman and his family's ownership stake in Porsche.
The two companies have long had intertwined alliances, such as the Volkswagen Touareg/Porsche Cayenne, which were developed together and share engineering platforms and powertrains. More co-developed vehicles are expected to come from VW's ownership of the legendary sports car company.