Porsche and Volkswagen Resume Merger Talks
Both Porsche and Volkswagen have released statements saying they are still working toward finalizing the details of a merger. Over the weekend, a VW spokesperson said the talks had halted because Porsche was lacking a proper integration strategy.
Some of the troubleis said to have stemmed from the feuding cousins who also happen to be chairmen of the two companies. However, both Porsche chairman Wolfgang Porsche and his cousin, Volkswagen chairman Ferdinand Piech, have put aside their differences in favor of working toward the goal of combining the two companies.
Another roadblock for the deal has been Porsche’s financial standing. The company carries a €9 billion ($12.27 billion) net debt. Porsche attempted to refinance the debt in March but was only able to get €10 billion of the €12.5 billion that it was seeking. A spokesperson for the company said that Porsche was “well on its way” to getting the remaining €2.5 billion loan.
One final hurdle for Porsche will be the 20-percent stake that the government of Lower Saxony owns in VW. That share gives the German state the right to veto significant decisions, which could result in further opposition to the deal at some point down the line.
Source: Automotive News