Court tosses Germany's VW protection law
The European Union's highest court Tuesday tossed the law protecting German car-maker Volkswagen from unwanted takeovers, allowing Porsche to do just that.
Striking down the law would allow Porsche to increase its 31-percent stake to a majority, Deutsche Welle reported Tuesday. Porsche has made known its desire to move beyond the luxury sports car market.
Porsche said it has enough options that would "significantly" increase its share in VW but stopped short of saying it had enough for a majority stake.
In its the case before the European Court of Justice in Luxembourg, the European Commission argued the "Volkswagen law" violated the union's rules on free movement of capital. Besides deciding in favor of the commission, the court will order Germany to change its law.
The German government said it accepted the court's decision, Deutsche Welle said.
The German government adopted the law in 1960 to protect the state of Lower Saxony, which owns 20.1 percent of Volkswagen’s shares. Porsche spent more than $7 billion to buy nearly 31 percent of Volkswagen’s shares, but its voting share is capped at 20 percent, the same as Lower Saxony’s // Copyright 2007 by United Press International
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