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Volkswagen-Porsche merger further delayed

By Giulia Cambieri

The management team at Volkswagen are “urgently” examining “potential courses of action” to ensure that the planned merger of the German carmaker with Porsche can go ahead, according to a spokesman for VW.

VW said this week that efforts to merge the two family-controlled companies are being hampered by legal issues relating to Porsche's failed attempt to take over Volkswagen in 2008, which saw Porsche accumulate a debt of €10 billion.

But the spokesman for Volkswagen told CampdenFB the company remains committed to creating an integrated automotive group, as it offers “attractive growth prospects and a solid finance position”.

“The integrated group will hold a leading position in terms of global market presence, segment coverage and technology innovation,” he said.

Initially, it was hoped that the merger could take place before the end of 2011, but the spokesman said the company was now unsure when this would happen because of the ongoing legal issues.

Porsche has faced lawsuits in Germany and the US from investors that claim the Stuttgart-based automaker caused them to suffer a loss of more than $1 billion as a result of misleading comments on its intentions to take over Volkswagen. Porsche has defined the claims as illegitimate.

A statement released by Volkswagen on 8 September said the legal proceedings "mean that it is currently impossible to quantify the economic risks of a merger and therefore to perform the valuation of Porsche SE required to determine the exchange ratio”.

Volkswagen’s management team is examining alternative options to merge with Porsche, other than via stock options as initially planned, the spokesman said.

The results of this analysis will be presented to the supervisory board before the end of the year.

Porsche and Volkswagen are controlled by rival branches of the same family. Porsche is headed by Wolfgang Porsche and Volkswagen by Ferdinand Piech – both grandsons of Porsche’s founder, Ferdinand Porsche. However, Piech also owns 46.3% of Porsche.  

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