Volkswagen AG — M&A Activity 2012

Jul 4, 2012

News Details

Ad-hoc | 4 July 2012 21:30

VOLKSWAGEN AG: Volkswagen and Porsche create integrated automotive group

VOLKSWAGEN AG / Key word(s): Strategic Company Decision

04.07.2012 21:30

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Volkswagen and Porsche create integrated automotive group
Consolidation of Porsche AG expected to take effect as from
August 1, 2012 - Clearly positive impact on consolidated profit

Volkswagen Aktiengesellschaft and Porsche Automobil Holding SE
(Porsche SE) are to create the integrated automotive group through the
contribution in full of Porsche's automotive business to the
Volkswagen Group, with the move expected to already take effect as of
August 1, 2012. The relevant governing bodies of the two companies
approved the plan for this today, following the issue of all the
requisite advance rulings from the tax authorities.

Porsche SE will contribute its automotive business in full to
Volkswagen AG, which already holds 49.9 percent of Porsche AG
indirectly. Once the transaction has closed, Volkswagen will hold
100 percent of the shares of Porsche AG via an intermediate holding
company. In return, Porsche SE will receive consideration totaling
around EUR4.46 billion plus one ordinary share of Volkswagen AG. The
cash consideration is based on the equity value of EUR3.88 billion for
the remaining shares of Porsche AG set out in the Comprehensive
Agreement, plus a number of adjustment items. Among other things,
Porsche SE will be remunerated for dividend payments from its indirect
stake in Porsche AG that it would have received as well as for half of
the present value of the net synergies realizable as a result of the
accelerated integration, which amount to a total of approx.
EUR320 million.

The consolidation of Porsche's highly profitable automotive business,
which is expected to take effect as from August 1, 2012, will have a
positive impact on Volkswagen's consolidated profit. With regard to
operating profit for the current fiscal year, the initial high
depreciation and amortization charges resulting from the so-called
purchase price allocation are expected to largely offset the earnings
contribution. As a consequence of the consolidation of Porsche's
automotive business, Volkswagen must remeasure its existing shares in
Porsche Zwischenholding GmbH at their fair value. For the current
fiscal year, based on the measurement parameters as of March 31, 2012,
this will result in a clearly positive noncash effect of more than
EUR9 billion in the Volkswagen Group's financial result. Net liquidity
in the Automotive Division is expected to decline by a total of
approx. EUR7 billion: Apart from the cash consideration of around
EUR4.46 billion, the initial consolidation of Porsche AG's negative net
liquidity - expected to be around minus EUR2.5 billion - will impact
liquidity at the Volkswagen Group.

Wolfsburg, July 4, 2012

Volkswagen AG - The Board of Management

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Language: English
Company: VOLKSWAGEN AG
Brieffach 1849
38436 Wolfsburg
Germany
Phone: +49 (0)5361 9 - 49840
Fax: +49 (0)5361 9 - 30411
E-mail: christine.ritz@volkswagen.de
Internet: www.volkswagenag.com/ir
ISIN: DE0007664039, DE0007664005
WKN: 766403, 766400
Indices: DAX, Euro Stoxx 50
Listed: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime
Standard), Hamburg, Hannover, München, Stuttgart; Terminbörse
EUREX; London, Luxembourg, SIX

End of Announcement DGAP News-Service

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