Porsche and Volkswagen’s curious merger – the one where Porsche unsuccessfully tried to take over much larger VW, only to be swallowed up by its intended purchase – is looking up, says the German sports car manufacturer’s CEO, despite reports to the contrary.
“Our clear, common goal is, and remains, the merger,” Volkswagen CEO Martin Winterkorn told the public at Porsche’s annual meeting in Stuttgart, near its headquarters.
Both automakers, which are run by the same management team now, are confident that the merger will go through, although VW will have the option to acquire Porsche by other means if necessary should their efforts fail.
A handful of complex tax issues stand in the way of the merger’s completion, but Porsche’s CFO says he is working directly with German authorities to clear things up. Porsche is being investigated both in Germany and in the United States for market manipulations, which could force the merger to fail.
Porsche has sliced its debt by about 1.5 billion euros ($2.15 billion) ahead of the merger. Although Porsche’s financial standing was solid a few years ago, it incurred substantial debt when it tried to buy Volkswagen. When its efforts failed thanks to a worsening financial market, Porsche’s took on rapidly-growing debt.
In late 2009, Volkswagen found that it had to acquire 49.9 percent of Porsche. It holds the option to acquire the remaining 50.1 percent between late 2012 and early 2015, which is still an option should the merger fall through.
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