Shares of Volkswagen climbed 146 percent on Monday after fellow German automaker Porsche announced plans to boost its stake in VW to 75 percent in 2009.
Volkswagen, Europe’s biggest car maker which is building a plant in Chattanooga, closed at $649.11 a share in trading in Frankfurt, Germany. Shares had risen as high as $791.21.
Porsche Automobil Holding SE was already Volkswagen AG’s biggest shareholder and said Sunday it had lifted its stake to 42.6 percent and secured options to buy more of the company.
“The goal remains, as long as the financial conditions are right, to increase (the stake) to 75 percent in 2009 and clear the way for a controlling stake,” the Stuttgart-based company said.
As part of that goal, Porsche said it is sticking to plans to lift its VW stake above the 50 percent mark before the year’s end.
Also, VW’s stock has fluctuated in recent weeks due to hedge funding strategies.
Aaron Bragman, an auto analyst for Global Insight, said the takeover by Porsche of the much larger VW is “something (Porsche) has to do.”
Porsche is a relatively small but highly profitable maker of luxury cars and sport utility vehicles. Mr. Bragman said Porsche will be able to meet European clean air standards if it combines with an efficient maker of compact cars, such as VW.
The updraft in VW’s stock comes as VW Chief Executive Officer Martin Winterkorn said late last week that 2009 “will be hard for the whole industry.”
“We see customer confidence going down on a global scale,” he said.
Both Porsche and VW share members on their boards. VW supervisory board Chairman Ferdinand Piech also serves on the Porsche board and is a major shareholder in the sports car maker.
Wendelin Wiedeking, Porsche’s chief executive, is on VW’s supervisory board.
Investors were not as pleased with Porsche, however, pushing its shares 7.6 percent lower on Monday to $52.99.
VW plans to make a new mid-size sedan at its Chattanooga plant, which is slated to open in early 2011 and employ over 2,000 workers.
The Associated Press contributed to this report.
Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...