Volkswagen Puts Merger with Porsche on Hold
Porsche has hit a lot of bumps on the road to its planned acquisition of Volkswagen. Recently it decided instead of a takeover, the two companies should merge, saying the “10 brands shall stand below an integrative leading company.” Now Porsche is encountering difficultly with the merger, thanks to Volkswagen dragging its feet.
“We recognized at the end of the week that Porsche is lacking several fundamental conditions for the discussions,” said a VW spokesman on Sunday. According to VW, Porsche does not have an integration strategy and needs to sort out internally where it is headed. VW also said it is open to resuming talks at any time.
Currently, Porsche owns a 51-percent stake in Volkswagen AG. Another reason the merger has been put on hold is the debate over who will lead the new group. The prime minister of the German state of Lower Saxony, which holds 20 percent of VW, and the chief executive of the Audi unit both support VW Chief Executive Officer Martin Winterkorn as the new leader. However, Porsche reportedly isn’t too keen on that idea.
Just because the talks have halted for now does not mean that either company has lost interest in the matrimony. Porsche is scheduled to confer internally to discuss the pause in negotiations.
Source: Automotive News