The proposed merger between Volkswagen and Porsche SE, originally scheduled for last year, was delayed again by a €2 billion lawsuit from a group of investment funds.
In 2009, Volkswagen and Porsche agreed to a merger after Porsche’s finances were threatened by a €10 billion debt which it racked up after trying unsuccessfully to takeover VW. Since then law suits from disgruntled investors in Germany and the U.S. have undermined the merger. Investors in the U.S. have sued for $1 billion they claim was lost in a short-seller squeeze allegedly orchestrated by Porsche.
According to Deutsche Bank, the latest law suit underlines its view that the merger will not happen any time soon.
“We continue to wonder why an early settlement should be expected as the complexity of this process could likely lead to a long-lasting one. We thus continue to regard the merger likelihood as very low,” said Deutsche Bank auto analyst Jochen Gehrke.
Neil Winton – January 10, 2012