An Automotive News report says that the way has been paved for Porsche to take a majority stake in Germany's largest automaker, Volkswagen.
A court ruling determined that the so-called VW law, which dates back nearly 50 years, is illegal. Under the original law, over 80 percent of shareholders votes are required to pass an important decision, as opposed to the usual 50 percent. In effect, a small shareholder with 20 percent of the stock could block major decisions that 80 percent of shareholders favored.
According to the report, the European Commission believes that the state of Lower Saxony enjoyed special powers as a result of the legislation- as they held about 20 percent of VW stock.
That minority is said to have been enough to stop or dissuade foreign investors from taking stakes in the company. This hinders the free movement of capital, and is thus illegal. With this age-old technicality out of the way, VW can no longer use state-run minority blocking, and Porsche will have an easier time taking in more shares.
Analysts expect the German performance car builder to up their ownership in VW to 51 percent early next month.
A court ruling determined that the so-called VW law, which dates back nearly 50 years, is illegal. Under the original law, over 80 percent of shareholders votes are required to pass an important decision, as opposed to the usual 50 percent. In effect, a small shareholder with 20 percent of the stock could block major decisions that 80 percent of shareholders favored.
According to the report, the European Commission believes that the state of Lower Saxony enjoyed special powers as a result of the legislation- as they held about 20 percent of VW stock.
That minority is said to have been enough to stop or dissuade foreign investors from taking stakes in the company. This hinders the free movement of capital, and is thus illegal. With this age-old technicality out of the way, VW can no longer use state-run minority blocking, and Porsche will have an easier time taking in more shares.
Analysts expect the German performance car builder to up their ownership in VW to 51 percent early next month.