The planned merger of Volkswagen and Porsche won’t take place by the end of 2011 as previously planned, VW said in a statement.
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“The planned merger with Porsche SE cannot be implemented within the time frame provided for in the comprehensive agreement. Nevertheless, all parties remain committed to the goal of creating an integrated automotive group with Porsche and are convinced that this will take place,” VW said.
“Continuing legal hurdles 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. The main causes of uncertainty are the ongoing proceedings and actions brought against Porsche SE in Germany and the USA for alleged market manipulation. According to the information currently available, these legal hurdles are no longer expected to be removed in time. One factor influencing the board of management’s assessment was an indication by the Stuttgart public prosecutors of the length of time needed for the preliminary investigations.”
The management board expects to put a new plan for the merger before the supervisory board before the end of the year.
“We expect a negative impact [on the Porsche share price], but we are not completely surprised after uncertain signals from U.S. lawsuits and legal obstacles in Germany,” a German trader told Reuters.
