Suzuki confident of dissolving partnership with VW

Suzuki confident of dissolving partnership with VW
ALMS Lime Rock Park Spotter Guide available now
Volkswagen and Porsche SE create integrated automotive group

Posted: 05 Jul 2012 07:32 AM PDT

Suzuki Motor Corp. says it is confident it will be successful in its bid to sever relations with Volkswagen AG as legal arbitration between the two automakers gets under way.

Last November, Suzuki said it would use arbitration to force VW to return the 19.9 percent stake in Suzuki that it acquired in 2009 as part of a partnership agreement.

VW paid 1.7 billion euros ($2.1 billion) for the shares. Sources close to Suzuki say the company has offered to buy them back at market price, currently about 2 billion euros.

“The agreement with VW is already terminated,” said Yasuhito Harayama, Suzuki’s vice president of business development, during the company’s annual shareholders’ meeting in Hamamatsu, Japan. “Thus, VW does not have the legitimacy to keep on holding Suzuki shares… We are in arbitration in the UK for the return of these shares.”

“We are confident that we will be able to report good news,” Harayama added.

The partnership fell apart after Suzuki claimed VW had not provided technology that it had promised as part of the agreement.

Arbitration hearings will be held in London in the spring of 2013, a source said.

The legal proceedings will take place at the ICC International Court of Arbitration in London. International companies often use arbitrators in the UK capital to resolve differences because their decisions are respected and the process takes place in private.

VW says Suzuki broke the terms of their partnership when it turned to Fiat for supply of a 1.6-liter diesel engine for its SX4 subcompact SUV. “Volkswagen takes the view that this contradicts the terms of the cooperation agreement,” the company said in a statement last November.

VW originally turned to Suzuki to gain access to India’s growing market and tap Suzuki’s expertise with sub 1-liter cars. In turn, the German automaker agreed to share its technology with Suzuki.

“The management of Volkswagen and Suzuki have concluded that the complementary strengths of each company make for a perfect fit,” VW said in a statement in 2009.

- Autonews

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ALMS Lime Rock Park Spotter Guide available now

Posted: 05 Jul 2012 06:01 AM PDT

ONEIGHTURBO

ALMS Lime Rock Park Spotter Guide available now

The American Le Mans Series is back in action this weekend from Lime Rock Park. The series resumes after a long 2 months off, with the 24 Hours of Le Mans splitting it up.

Andy Blackmore has just real released the Lime Rock Park Spotter Guide and it is now available to download This will receive an update on Thursday night when a new livery is announced….

Download here

For years, the track was listed as being 1.53 miles in length—the story goes that right after it was built, somebody used the odometer in a Chevy to measure the track length—and 1.53 was taken as gospel. Following the 2008 reconstruction (see below), Lime Rock’s operations people measured all four possible configurations, and as it turns out, each was 1.5-miles long, plus or minus a few hundred feet. The “classic” configuration is 7 turns, while the three optional layouts are 8, 9 and 10 turns.

Simraceway announces new tracks including Lime Rock Park

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Volkswagen and Porsche SE create integrated automotive group

Posted: 05 Jul 2012 05:28 AM PDT

ONEIGHTURBO

Volkswagen and Porsche create integrated automotive group

Structure before the transaction

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. The move will allow the integrated automotive group consisting of Volkswagen and Porsche to become reality some two years earlier than would have been economically feasible under the put/call options provided for in the Comprehensive Agreement signed in August 2009.

Porsche SE will receive around €4.46 billion and one Volkswagen ordinary share as consideration for contributing the 50.1 percent of Porsche AG not yet owned by Volkswagen. “The unique Porsche brand will now become an integral part of the Volkswagen Group. That is good for Volkswagen, good for Porsche and good for Germany as an industrial location. Combining their operating business will make Volkswagen and Porsche even stronger – both financially and strategically – going forward. We can now cooperate even more closely and jointly leverage new growth opportunities in the high-margin premium segment through targeted investments in pioneering products and technologies. This will benefit our customers, our employees and our shareholders”, said Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft.

Accelerated integration model permits the combination of automotive business with expected effect as from August 1, 2012
Porsche’s automotive business will be contributed in full to the Volkswagen Group ahead of schedule for around €4.46 billion plus one Volkswagen ordinary share
Net synergies of approximately €320 million from the accelerated integration will be split 50:50 between the two companies
CEO Prof. Dr. Martin Winterkorn: “Good for Volkswagen, good for Porsche and good for Germany as an industrial location”

The two companies announced last September that it would not be possible to implement the merger of Volkswagen AG and Porsche SE provided for in the Comprehensive Agreement signed in 2009 by the end of 2011, as had been agreed. In addition, the tax treatment of the put/call options provided for in the Comprehensive Agreement does not allow the automotive business to be integrated on economically feasible terms before the second half of 2014. The two companies have therefore been exploring alternative ways of achieving their common point in time.

The accelerated integration model that has now been agreed is based on the Umwandlungssteuergesetz (Reorganization Tax Act) and the Umwandlungssteuererlass (Taxation of Reorganizations Circular) which was published at the end of 2011, as well as advance rulings from the relevant tax authorities, and can be implemented on economically feasible terms. Under the structure developed jointly by the two companies, Porsche SE will contribute its operations as a holding company, including its 50.1 percent Porsche stake, to Volkswagen Aktiengesellschaft, which already holds indirectly 49.9 percent of Porsche AG. 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 a consideration totaling around €4.46 billion plus one ordinary share of Volkswagen. The cash consideration is based on the equity value of €3.88 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 approximately €320 million.

CEO Prof. Dr. Martin Winterkorn: Good for Volkswagen, good for Porsche and good for Germany as an industrial location

Structure after the transaction

“The accelerated integration will allow us to start implementing a joint strategy for Porsche’s automotive business more quickly, to realize key joint projects more rapidly, and hence to leverage additional growth opportunities in attractive market segments. It will also enable Volkswagen AG and Porsche AG to concentrate fully on their operating business by making day-to-day cooperation much simpler”, said CFO Hans Dieter Potsch.

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 year, based on the measurement parameters as of March 31, 2012, this will result in a clearly positive non-cash effect of more than €9 billion in the Volkswagen Group’s financial result. Net liquidity in the Automotive Division is expected to decline by a total of approximately €7 billion. Apart from the cash consideration of around €4.46 billion, the initial consolidation of Porsche AG’s negative net liquidity – expected to be around minus €2.5 billion – will impact liquidity at the Volkswagen Group.

“The course we are following makes strategic sense and will bring sustained benefits for all stakeholders, it creates transparency as to future developments, and lays the foundations for swiftly intensifying cooperation between Volkswagen and Porsche AG. For Volkswagen, our sound financial and liquidity position and maintaining our strong rating are also important”, CFO Potsch continued.

- Porsche