CEO Martin Winterkorn said that Volkswagen AG would need to delay a merger with Porsche SE that’s expected to be completed next year. VW said that risks from US lawsuits and German tax issues should be resolved first.
Winterkorn, who is also CEO of Porsche's holding company, said that the legal proceedings “may drag on for some time to come until a final decision is reached.”
As a result, the planned merger might be delayed as the company is still facing a tax-related hurdle and several legal obstacles.
It was in August 2009 that VW agreed to merging with Porsche in August 2009 after Porsche’s debt tripled to over 10 billion euros ($14 billion) following a failed bid to buy VW by securing stock through options transactions.
Since that time, VW has bought 49.9% of Porsche's operating unit for 3.9 billion euros, setting the stage for a merger in 2011.
The suit against Porsche was designed by US-based short sellers of VW stock who assert that the sports-car maker secretly cornered the market in VW shares and these later caused them over $1 billion in losses.
Elliott Associates LP, Glenhill Capital LP, Glenview Capital Partners LP and other short sellers, filed the suit in the Manhattan federal court. In January, the court will decide in Germany.