| For 47 years, Germany has protected Europe's | | | | considerable influence on the automaker. The |
| largest automaker Volkswagen from any hostile | | | | state of Lower Saxony is the automaker's |
| takeovers. A German law forbids any firm or | | | | second biggest shareholder and it is |
| individual from acquiring more than 20 | | | | considered to be the arm of the government |
| percent of Volkswagen's shares. That law | | | | operating within the ranks of the listed |
| though which has stood for almost half a | | | | company. |
| century is now gone as the European Union | | | | |
| Court of Justice decided that the legislation | | | | "This situation is liable to deter direct |
| should be abolished. | | | | investors from other member states," said the |
| | | | court in a statement. Investors are limited |
| The scrapping of the law though is not as | | | | to only twenty percent of voting rights even |
| severe as it would have been if the leading | | | | if they own more than 20 percent of the |
| firm looking to acquire Volkswagen is not a | | | | shares of Volkswagen, known for the Beetle |
| German company. It has been the | | | | and reliable auto parts such as the VW |
| responsibility of the "Volkswagen law" to | | | | headlight switch, side mirrors, transmission |
| keep its control in Germany. Today that the | | | | and engines. |
| law is no longer valid, Germany is not in | | | | |
| danger of losing Volkswagen to a far Eastern | | | | Porsche has been buying shares of Volkswagen |
| competitor or a private equity fund as | | | | and now owns 31 percent. Now that the |
| Porsche, a German automaker is setting its | | | | Volkswagen law is no longer in place, Porsche |
| sight on taking control of the giant | | | | can either buy more shares of Volkswagen to |
| automaker. | | | | take control of the automaker or wait for the |
| | | | company's annual meeting where they can be |
| The decision of the European Union Court of | | | | given total control of Volkswagen. Porsche |
| Justice though sent a clear message to all | | | | has ambitious plans for Volkswagen and it can |
| its member countries. And that is the EU | | | | be achieved once it takes control of the |
| will not be allowing national protectionism | | | | company 14 times bigger. |
| get in the way of free movement of capital. | | | | |
| Volkswagen is symbolic to Germany since it | | | | It is reported that Porsche is looking to |
| has risen from the ashes of the Second World | | | | make Volkswagen a strong rival of Toyota in |
| War and gave the European country new pride. | | | | terms of productivity and profitability. |
| The European Union made it clear that there | | | | Porsche has been known to be a highly |
| will be no scared cows. | | | | profitable automaker with its lineup of |
| | | | upscale vehicles. With the automaker's |
| The EU Court of Justice ruled that the | | | | involvement in the development of new |
| Volkswagen law is discouraging foreign | | | | vehicles for Volkswagen, the auto industry |
| investors to take a stake in Volkswagen as | | | | can only wait what this development will |
| German authorities are exercising | | | | bring to Volkswagen. |