FRANKFURT, Germany (AP) — A labor court on Wednesday rejected a claim by Volkswagen's works council that sought to prevent likely suitor Porsche from forming a new holding company.
The works council filed the petition with the Stuttgart Labor Court after Porsche AG said it would form a holding company, Porsche Automobil Holding SE, that would oversee not only Porsche but its holdings in Volkswagen AG.
Both Porsche and Volkswagen are to have three seats apiece on the holding company's supervisory board, according to the plans.
But the works council of Wolfsburg-based Volkswagen wanted more seats because it employs some 329,000 workers compared to the 11,000 at Porsche.
Porsche currently owns 31 percent of Volkswagen AG but only had a 20-percent voting right due to a German law protecting VW. But that is now going to change, after the European Court of Justice ruled Tuesday that Germany's so-called ''VW law,'' had illegally shield Volkswagen from any takeovers.
That ruling, in effect, has put Porsche in the fast lane to acquiring more shares of Volkswagen with the likely aim of taking it over.
Stuttgart-based Porsche lauded the labor court decision.
''With a VW stake of just over 30 percent, there's no legal basis that would justify Volkswagen staff to have a say in the negotiations on the co-determiniation rules,'' the sports car maker said.
Shares of Porsche were up nearly 2.7 percent to euro1,754.38 (US$2,496.48) after the decision while Volkswagen shares were up nearly 2.2 percent to euro173.42 (US$246.78).