Porsche/VW Merger Delayed On Lawsuits

According to Bloomberg, Volkswagen AG VOW may be delaying the merger with Porsche PAH due to risks from U.S. lawsuits and German tax issues. VW CEO Martin Winterkorn was quoted “It can't be ruled out that the legal proceedings may drag on for some time to come until a final decision is reached. For that reason, the planned merger could possibly be delayed,” said Winterkorn, who also heads Porsche's board, said in the text of a speech today in Stuttgart. “We're still facing a tax-related hurdle and several legal obstacles.” The idea of the merger came about in late 2009 when Porsche's debt tripled to more than $14 billion U.S. dollars (~$10 billion euros) and the company failed to pay up on a bid to buy VW. Since then, VW has acquired 49.9% of Porsche's operations for around $3.9 billion euros. The merger was originally planned for 2011, but may face delays since Porsche is involved in a lawsuit started by short sellers of VW stock, who are claiming Porsche cornered the market in VW shares secretly and are the reason for the $1 billion loss in shares.