Porsche heads for domination agreement

    Interest in Volkswagen increased to 42.6 percent

    STUTTGART, Oct. 27 /CNW/ - Due to the dramatic distortions on the
financial markets Porsche Automobil Holding SE, Stuttgart, has decided over
the weekend to disclose its holdings in shares and hedging positions related
to the takeover of Volkswagen AG, Wolfsburg. At the end of last week Porsche
SE held 42.6 percent of the Volkswagen ordinary shares and in addition
31.5 percent in so called cash settled options relating to Volkswagen ordinary
shares to hedge against price risks, representing a total of 74.1 percent.
Upon settlement of these options Porsche will receive in cash the difference
between the then actual Volkswagen share price and the underlying strike price
in cash. The Volkswagen shares will be bought in each case at market price.
    Assuming the economic framework conditions are suitable, the aim is to
increase to 75 percent in 2009, paving the way to a domination agreement. The
intention to increase the Volkswagen stake to above 50 percent in
November/December 2008 remains unchanged.
    Porsche has decided to make this announcement after it became clear that
there are by far more short positions in the market than expected. The
disclosure should give so called short sellers - meaning financial
institutions which have betted or are still betting on a falling share price
in Volkswagen - the opportunity to settle their relevant positions without
rush and without facing major risks.
    In addition, the EU commission will - according to media reports over the
weekend - sometime soon qualify the new draft of the VW Act tabled by the
Federal Government as not complying with EU law. It is therefore to be
expected that a new lawsuit will be filed with the European Court of Justice.
    Also as a reason for today's step served the fact, that the families
Porsche and Piech, who own all Porsche ordinary shares, have expressed their
unconditioned and undivided backing of the steps taken by the members of
Porsche SE's board of management Dr. Wendelin Wiedeking and Holger Harter. As
reported, both families clearly expressed last week their support for a
domination of the Volkswagen group by Porsche.

For further information:

For further information: Laurance Yap, E-mail: laurance.yap@porsche.ca,
Phone: (905) 219-2195

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