Sep 8, 2011
Volkswagen (ETR:VOW) says on Thursday it's planned merger with Porsche (ETR:PAH3) will not go through as planned, at least not yet.
The company said the merger could not be implemented within the time frame agreed upon due to uncertainty of the economy, legal hurdles, as well as proper valuation of Porsche.
In the announcement the company said, "From Volkswagen's perspective, the 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."
In the coming weeks, members of Volkswagen's Board of Management will analyze whether there are other potential avenues to explore to complete the agreement. Both companies still believe the planned merger will continue at a later time
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