Volkswagen AG and Porsche SE failed in their attempts to combine by the end of the year as lawsuits left them unable to determine a valuation, pill raising doubts over whether a merger of the German automakers will ever take place.
“These legal hurdles are no longer expected to be removed in time,” Volkswagen said in a statement, adding that “an indication by the Stuttgart public prosecutors of the length of time needed for the preliminary investigations” was among the factors that led to the decision.
“Nevertheless, all parties remain committed to the goal of creating an integrated automotive group with Porsche and are convinced that this will take place,” it added.
The two agreed to the merger deal in 2009 after Porsche nearly sank itself with debt in trying to take over VW. Porsche still faces shareholder lawsuits and a U.S. stock manipulation probe (denied by Porsche) over actions in that Byzantine effort.
Volkswagen further said that in the coming weeks, its board of management will, “analyze whether other potential courses of action exist for achieving the goal of creating an integrated automotive group with Porsche”.
It said the results of this review would be presented to the company’s supervisory board before the end of this year.
Porsche tumbled 9.3 percent to 39.90 euros, while Volkswagen’s preferred shares rose 0.2 percent to 108.20 euros, as Europe’s largest carmaker delayed its merger with the maker of the 911 sports car.