July 28, 2009

Last week after months of feuding, Porsche’s family owners agreed to a merger with Volkswagen. The merger, planned for 2011, will bring Porsche under the umbrella of Europe’s biggest car and truck empire.

“The Porsche / Volkswagen case is an interesting example of how cousins in third generation family businesses find it difficult to construct a shared ownership vision, especially when strong personalities are involved at the opposing ends,” stated Joachim Schwass, Professor of Family Business at IMD and the Director of the Leading the Family Business program.

Professor Schwass, a German national, believes that the success of this merger will depend on:

- the family in regards to the final overall value of their ownership holdings in Porsche and Volkswagen
- the business stakeholders on the economic value created in the new group structure.

In conclusion, he said: “The very final assessment of the wisdom of these choices will be made by the next generation of the Porsche and Piech families. That is how family businesses function.”