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Porsche shares tank as Volkswagen says legal concerns prevent merger by year end
FRANKFURT, Germany (AP) ' Porsche shares are down sharply after Volkswagen said a merger between the two German carmakers will not be completed by the year-end as planned.
Shares in Porsche Automobil Holding SE traded down 11.3 percent Friday at euro39.21.
Volkswagen, which owns 49.9 percent of the automaking part of Porsche and has an option to buy the rest, says Porsche's holding company faces potential legal actions in Germany and the United States over alleged share manipulation.
Since those proceedings won't be resolved soon, VW's financial risk can't be assessed.
Volkswagen AG said it would seek another way to integrate Porsche, either through the purchase option or by other means to be explored by year end.
The two companies are already extensively intertwined; VW board chairman Ferdinand Piech is a member of the family that controls Porsche, and VW CEO Martin Winterkorn is also CEO of the Porsche Holding.
The two companies also cooperate in making Porsche's Cayenne SUV.
Porsche initially tried to gain control of Volkswagen, but ran up too much debt and Volkswagen turned the table and wound up in a position to make Porsche one of its 10 brands.
Investors who lost money betting against Porsche shares during the takeover bid are suing, claiming the company manipulated share prices. Porsche denies any wrongdoing.