German Cartel ffice approves Porsche’s buying into Varta

On 9 October, the sports car manufacturer announced its intention to acquire a majority stake in the Varta subsidiary V4Drive Battery. However, the Cartel Office still had to give its approval – which has now been granted. Specifically, the competition authorities have authorised both ‘the acquisition of a non-controlling interest in Varta AG’ by Porsche and the acquisition of a majority stake, including sole control, in V4Drive Battery GmbH, Varta’s business unit for large-format lithium-ion cells. However, Varta AG will remain a minority shareholder alongside the sports car manufacturer.

This represents a sustainable solution for Varta. In October, the ailing company had already received a bridge loan and agreed on a reorganisation concept with lenders and promissory note creditors as well as with the major Austrian shareholder Michael Tojner and Porsche. As part of this, Porsche and Tojner are each investing 30 million euros in the main company, which will also be relieved of debt through a haircut.

“Our merger control review was only concerned with whether the project raises competition concerns,” said Andreas Mundt, President of the German Federal Cartel Office. “We can rule these out. In principle, projects can be notified for merger control if they are sufficiently concrete. The actual feasibility of the solution now depends on issues outside of antitrust law.” Mundt emphasises that Porsche will not gain any control over Varta as a result of the project, in particular no veto rights with regard to strategic business policy decisions. In addition, the Michael Tojner Group will remain a shareholder in Varta through a subsidiary.

The Cartel Office also takes a favourable view of the fact that the VW Group – as the parent company of Porsche – and Varta operate in different markets. According to the Office, no significant competitive changes are to be expected with regard to the supply chain either, “especially as Porsche has already been Varta’s main customer for lithium-ion battery cells in the automotive sector.” However, V4Drive is also expected to address customers outside of Porsche in the future.

bundeskartellamt.de (in German)