Porsche resignation to lead to VW merger

CEO Wendelin Wiedeking has quit Porsche along with finance head Holger Haerter. The company has been involved in an on-off takeover battle with larger rival Volkswagen until recently, however the plans resulted in 51 per cent of VW but also debts of €10bn euros and virtual bankruptcy. The two said in a statement that they hoped their departures would "make an important contribution to the pacification of the situation". The departures will open the way to VW taking over the sportscar-maker.

In a statement the Stuttgart-based firm said "in the last weeks Wiedeking and Haerter have come to the conclusion, that the further strategic development of Porsche SE and Porsche AG is better off, if they are not on the board as acting persons."

Wiedeking was a controversial figure in the industry, earning around €80m last year due to his deal guaranteeing him 0.9 per cent of the company's profit. Profit soared to €8.5bn in 2008 after Porsche took out options positions in VW shares, wrong-footing hedge funds and cleaning up as a result. However after 16 years at the helm and turning around the firm in the 1990s Wiedeking will now be replaced by Michael Macht, head of production, and walk away with a €50m pay-off.

In all-night meetings the carmaker's directors also agreed a capital increase of €5bn, some of which may come from selling a stake to Qatar.

WHAT THEY ARE SAYING:Stefan Bratzel, head of the Automotive Research Institute in Bergisch Gladbach on Bloomberg.com: "Wiedeking’s course has split the families and caused major irritations in Porsche’s working ties with VW. Wiedeking has no place in a combined VW-Porsche carmaker."

Tim Urquhart, an auto industry analyst at IHS Global Insight, in BusinessWeek: "Wiedeking, along with the company's chief financial officer, Holger Härter, have been largely responsible for the VW takeover strategy and must ultimately shoulder the blame for its failure and Porsche's current debt level." ·