Porsche SE profit rises ahead of Volkswagen tie-up

BERLIN (Reuters) - Germany's Porsche SE and Volkswagen complete their long-awaited tie-up on Wednesday and analysts see big potential in the move for both companies.

On Tuesday Porsche SE posted a six-month profit of 1.15 billion euros ($1.41 billion), against 149 million euros a year earlier.

Porsche said it expects net income to be in the "high" single-digit billions of euros this year, including one-time gains from combining with VW.

VW's planned purchase of the second half of Porsche AG on August 1 will add super luxury sports cars such as the iconic 911 model to the people's car company that is already Europe's biggest. It aims for world domination by 2018.

The two manufacturers had first agreed a full merger in August 2009, after Porsche racked up more than 10 billion euros of debt in a failed attempt to take over VW, sparking feuds among the Porsche and Piech family dynasties.

VW bought 49.9 percent of Porsche's sports car operations in December 2009 for 3.9 billion euros and had sought to acquire the remainder through a share-swap with the holding company.

The car makers dropped the merger plan last year because of U.S. and German investor lawsuits accusing Porsche of covertly amassing VW shares, causing short-sellers to lose billions.

But on July 4, VW and Porsche agreed a deal allowing the Wolfsburg-based manufacturer to buy the remaining half of Porsche for 4.46 billion euros and avoid a tax bill of up to 1.5 billion euros by transferring a single VW share to Porsche.

Both companies already cooperate in countless areas. VW, which also includes luxury division Audi, makes the bodies for the Cayenne SUV and Panamera coupe, Porsche's two best-selling vehicles. They will jointly develop Porsche's next model, the Macan compact SUV, due to hit showrooms in 2014.

Once integration is completed, the two manufacturers expect to reap more than 700 million euros in development, purchasing and production and erase Porsche AG's 2.5 billion euros of debt. VW, which posted higher-than-expected operating profit of 3.28 billion in the second quarter, is bracing for full-year earnings to be boosted by more than 9 billion euros.

"Porsche is the most lucrative asset in premium auto making," said Stefan Bratzel, head of the Center of Automotive Management in Bergisch-Gladbach, Germany. "It's a great deal for VW with huge potential for both companies."

(Reporting By Andreas Cremer; Editing by Stephen Powell)

Source: http://news.yahoo.com/porsche-se-profit-rises-ahead-volkswagen-tie-141151232--finance.html

transcendental meditation trayvon martin obama care miss universe canada don draper gallagher madmen