Volkswagen, which already owned 99.64% of shares in Audi, has recently decided to buy out all the remaining minority shares of the German automobile manufacturer.
The link shared between Volkswagen and Audi goes back to the 1960s when Volkswagen first bought Auto Union, Audi’s predecessor, from Daimler. In addition, VW also owns shares of Lamborghini, Skoda, Porsche, Bentley, SEAT, and Ducatti.
Until now, Volkswagen only owned 99.64 % of shares in Audi AG. However, after Volkswagen’s recent annual general meeting, the German car manufacturer decided to buy out all of the remaining minority shares to hold 100% of the stake. This process will be completed as a squeeze-out. This technique allows a company’s majority shareholders to gain ownership of remaining shares by buying out the minority shareholders.
In that case, Volkswagen will be paying a 48% premium to minority shareholders in order to gain full ownership. The current share price of Audi AG stands at 1,050€ or around $1,180; however, Volkswagen is set to pay 1,551.53€ per Audi share ($1,827.7 at today’s exchange rate). To hold 100% of the company, VW will be buying 150,000 shares, costing them 230 million€ ($274 million).
Markus Duesmann, Audi’s CEO and Chairman of the Board of Management of Volkswagen Group’ Premium’, will now be the Group’ research and development lead’ and thus will be in charge of building the new car software organization.
“The Volkswagen Group is now consolidating all its strength. We are positioning ourselves competitively throughout the Volkswagen Group and lifting Group synergies and economies of scale to a new level,” statement made by Markus Duesmann, Chairman of the Board of Management.
This change of ownership should not affect Audi‘s customer base as Volkswagen assures it will focus on maintaining Audi on top of their portfolio.
VW has been going through a lot of internal changes lately. For example, Porsche CEO, Oliver Blume, was recently moved to take charge of the Volkswagen brand, which made Herbert Diess step down as VW’s head. However, he will still be holding the position of chairman of the VW group.
Duesmann will be moved to take charge of resurrecting the technological process of Audi after the diesel emissions-rigging scandal where many senior engineers were laid off.
Bram Schot, the CEO of Audi, stated that this change in ownership will gear up Audi’s strength in the VW group and revive the Vorsprung Durch Technik motto, or “progress through technology”, Audi’s former ad slogan.