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Volkswagen and Porsche

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Volkswagen and Porsche
Volkswagen and Porsche
- Corporate Finance Case study:
Mergers & Acquisitions of listed companies by
Joachim Häcker

What is the macro view of this case study?
Small fish tries to eat big fish (financial figures are end of 2005 and rounded):

VW: Market cap: €16 bn
Book value: €24 bn
Cash and cash equivalent: €8 bn
(+€4 bn marketable securities)

Porsche: Market cap: €11 bn
Book value: €3.4 bn
Cash and cash equivalent: €3.6 bn

VW Porsche case study – by Joachim Häcker
Seite 1

What is the macro view of the case study?
What is the agenda of this presentation?
What is the agenda of this presentation?

1. Basic understanding:
Basic understanding:
How did the small fish try to eat the big fish - the takeover process!
2. Question 1:
Question 1:
What does Porsche need to clarify in order to successfully attack the big fish?
3. Question 2:
How can Porsche make sure that nobody realizes that the small fish is about to eat the big fish?
4. Question 3:
How can Porsche finance the attack?

VW Porsche case study – by Joachim Häcker
Seite 2

1. Basic understanding of the takeover process: The situation of VW in 2005
P/B ratio of VW, Daimler-Chrysler and BMW, values rounded off (status: 2005 end)
€ bn

€ bn

€ bn

VW: Lowest P/B ratio
VW Porsche case study – by Joachim Häcker
Seite 3

1. Basic understanding of the takeover process: The situation of VW in 2005
Porsche: Growth of turnover from 2000/2001 – 2004/2005

CAGR of 10,2%
VW Porsche case study – by Joachim Häcker
Seite 4

1. Basic understanding of the takeover process: The situation of VW in 2005
Porsche: Growth of net profit margin from 2000/2001 – 2004/2005

Net profit margin almost doubled from 2001 to 2005
VW Porsche case study – by Joachim Häcker
Seite 5

1. Basic understanding of the takeover process: The situation of VW in 2005
Return on Equity Ratio, Porsche and the competitors (Status as of: 2004 or 2004/2005)

Incredible high profitability
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