(Bloomberg) – Volkswagen AG said its merger with Porsche SE can no longer be completed by the end of the year as originally 
planned because of pending lawsuits.
“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,” Wolfsburg, Germany-based VW said in a statement today. “The main causes of uncertainty are the ongoing proceedings and actions brought against Porsche SE in Germany and the USA for alleged market manipulation.”
Porsche and Volkswagen agreed to combine in 2009 after Porsche racked up more than 10 billion euros ($14 billion) of debt in an unsuccessful attempt to gain control of VW. The carmaker used 4.9 billion euros ($6.9 billion) raised in a rights offering this year to cut debt below 1.5 billion euros, fulfilling a prerequisite for a merger with VW.
The planned merger with Porsche, which owns 51 percent of VW’s common stock, was originally scheduled for completion in the second half of 2011. German legal obstacles and an investigation into share-price manipulation allegations will likely push the deal’s completion into 2012, Porsche said Feb. 24. Volkswagen now owns 49.9 percent of Porsche’s carmaking operations.
Source: Bloomberg
