Volkswagen-Porsche merger could be delayed by 2012

Article by Christian Andrei, on February 24, 2011

Due to financial and legal hurdles, Volkswagen AG's planned merger with Porsche SE could be delayed into 2012. The integration is already in full swing with regards to manufacturing.

Porsche said a longer-than-expected probe into allegations of share-price manipulation by two former board members is likely to push completion of the merger into 2012.

Porsche recently said that while the probability of success decreases as the process drags out, it believes the merger will go ahead. In 2010, VW already said that the merger may be held up by U.S. lawsuits and German tax disputes.

As VW and Porsche are working on such issues, they are moving on with the merger on the factory floor. Plant director Ludger Teeken said a VW plant in Osnabrueck, Germany, will build Porsche Cayman and Boxster models.

VW already assembles the bodies for Porsche's four-door Panamera and Cayenne sport-utility vehicle at VW plants.

Stuttgart-based Porsche and Wolfsburg-based VW, in August 2009, agreed to merge following a failed attempt by the sports-car maker to take over its larger rival.

Porsche shareholders favored a EUR5 billion ($6.9 billion) share sale that would facilitate a merger by lowering debt piled up as part of its earlier takeover attempt.

Stipo Bralo, a Frankfurt-based analyst at SEB AG, said that VW is moving forward to fit Porsche into its structure. He also said that the merger is fully underway in operating terms. [via autonews - sub. required]

Topics: volkswagen, porsche

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