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Porsche, VW may not reach merger this week

Porsche, VW may not reach merger this week
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First Published: Wed, Jul 22 2009. 12 04 AM IST
Updated: Wed, Jul 22 2009. 12 04 AM IST
Berlin: Porsche SE may not make a decision this week on a plan to merge with Volkswagen AG as the sports car maker’s controlling families can’t agree on measures to reduce debt, three people familiar with the situation said.
Porsche’s supervisory board may delay a decision on a proposed stake sale to Volkswagen until 29 July at the earliest, said the people, who asked not to be identified because the negotiations are private. A board meeting scheduled for 23 July may yield no decision among the members of the Porsche and Piech families, the people said.
Volkswagen, whose supervisory board also meets 23 July, plans to discuss a proposal to take over Porsche’s operating unit in two steps valuing the company at €8 billion as part of a transaction that would involve an investment by Qatar, people familiar with the talks have said. The negotiations are hindered by a possible tax charge if VW completely takes over Porsche AG, one of the people said.
“This drama doesn’t seem to end,” said Stefan Bratzel, head of the Center of Automotive Research Institute in Bergisch Gladbach, Germany. “Neither Porsche nor Volkswagen can afford any further distraction.”
Spokesmen at Volkswagen and Porsche declined to comment.
Volkswagen rose €1.45, or 0.6%, to €237.95 as of 9.44am in Frankfurt trading. The carmaker’s stock fell 5.4% on Monday. Porsche was down 0.5% at €48.53 after declining 6.1% on Monday, the steepest slide since 13 May.
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First Published: Wed, Jul 22 2009. 12 04 AM IST
More Topics: Porsche | VW | Volkswagen | Porsche SE | Germany |