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Type Bachelor's Thesis
Scope Discipline-based scholarship
Title Volkswagen vs Porsche - An Event Study on the Takeover Battle that Turned into a Merger
Organization Unit
Authors
  • Dominique Burgherr
Supervisors
  • Michel Habib
  • Elisabeth Megally
Language
  • English
Institution University of Zurich
Faculty Faculty of Economics, Business Administration and Information Technology
Number of Pages 46
Date 2015
Abstract Text Executive Summary This paper examines Porsches attempt to takeover Volkswagen and the impact on the stock prices of Porsche and VW over the course of it. After acquiring smaller shares between 2005 and mid-2008, Porsche announced on October 26 2008, despite previous repeated denial, their intents to fully takeover the Volkswagen Group. Following first successes Porsche had to drop their plan in early 2009, as they were not able to obtain further loans. They alternated their plans to create an integrated automotive group with VW. After some difficulties over legal issues regarding Porsche, the companies finalized the merger on August 1 2012. Over the course of the takeover battle, the stock prices of both companies, albeit especially Volkswagen’s, showed some extreme alternations. To have a better view of the actual impact of the events in this takeover battle on the stock prices, event studies for three key events, Porsches announcement of their takeover plans, VW’s approval of an integrated group and the finalization of the merger, are conducted. For comparison each event study is conducted with two different models, the Market Model and the Constant Mean Return Model. The first two events show for both models statistical significant impacts on the stock price on several days. For the third event no significant influence on the stock of Porsche can be proven, while VW’s stock prices show significant influence only on one day. Over the entire course of the takeover battle, VW’s stock was influenced stronger and achieved a much bigger return than Porsche’s, whose stock went almost even with the CDAX.
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