It seems the merger between Volkswagen and Porsche has been complicated since the very beginning, and a report from Reuters shows that the dynamic may not change any time soon.
First Porsche was buying the much larger VW, then Porsche got stuck in a cash crunch and needed money from Volkswagen to stave off bankruptcy. Now VW owns 49.9 percent of Porsche, and The People's Automaker expects to own the luxury sports car maker outright by 2011. Straightforward enough, right? Well, a prospectus filed by VW in late March reportedly shows that the merger between the two German automakers may be delayed until 2011 and beyond. The reason for the delay could stem from Porsche's tax liabilities and hedge fund lawsuits alleging that former executives at the German sports car maker manipulated the market in an attempt to takeover Volkswagen.

A Volkswagen spokesperson reportedly told Reuters that the companies are still moving towards a 2011 merger as planned, while a Porsche spokesperson said the warnings in VW's perspective list every possible risk and that the chances of a major problem is limited. Still, some analysts sound skeptical. The report goes on to state that Bernstein Research analyst Max Warburton said the risks associated with purchasing Porsche could force VW to pay cash for a remaining 50.1 percent stake. That would mean VW would have to raise capital and assume unwanted debt – a lot of capital and a mountain of debt.

[Source: Reuters]

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