The announcement from Porsche (Germany) intend to be held in September 2005, a 20% stake in Volkswagen (Germany) was welcomed with open opposition on the part of many shareholders in both Volkswagen and Porsche. Major investment banks immediately downgraded to buy from a Porsche to a sell signal, arguing that the return on the massive investment 3 billion would probably never occur to shareholders. Although Porsche and VW were currently co-producer of the Porsche Cayenne and Volkswagen … Read more »

The announcement from Porsche (Germany) intend to be held in September 2005, a 20% stake in Volkswagen (Germany) was welcomed with open opposition on the part of many shareholders in both Volkswagen and Porsche. Major investment banks immediately downgraded to buy from a Porsche to a sell signal, arguing that the return on the massive investment 3 billion would probably never occur to shareholders. Although Porsche and VW were currently co-producer of the Porsche Cayenne and Volkswagen Touareg, this participation of the two companies would lead far on a path of cooperation far beyond the production of a sport utility vehicle. Although Porsche had explained his decision to invest in one that would insure the stability of future cooperation with VW, many critics saw it as a choice of the preservation of the shares of Porsche and Pi ch families at the expense of shareholders non-family firms.

This is a Thunderbird Case Study.
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from
Michael Moffett
Source: Thunderbird School of Global Management
13 pages.
Release date: 30 May 2007. Prod #: TB0067-PDF-ENG
Porsche Changes Tack HBR case solution

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