Volkswagen plans to take over Porsche faces obstacles

Volkswagen’s merger with Porsche is facing some significant legal and tax risks, according to details from Volkswagen’s prospectus for last month’s capital increase. The risk contains of potential tax liabilities and hedge fund lawsuits alleging former Porsche executives manipulated markets during Porsche’s attempted takeover of Volkswagen last year.

The risks could force both companies to delay the merger or abandon it altogether.

A Volkswagen spokesman said that its plans to merge in 2011 “have not changed.” A Porsche spokesman said that the risks listed in the prospectus come from a legal document, which lists “ever possible risk.”

– By: Stephen Calogera

Source: Automotive News (Subscription Required)