Porsche's planned merger with Volkswagen has hit an unexpected roadblock which has resulted in a temporary halt to negotiations.

Porsche's planned merger with Volkswagen has hit an unexpected roadblock which has resulted in a temporary halt to negotiations.

According to a VW spokesperson, "We recognized ... that Porsche is lacking several fundamental conditions for the discussions," including a plan which integrates the two companies. Essentially, Volkswagen's shareholders are contending that there's not enough synergy between the two companies to make a merger successful the way things currently stand.

Although Porsche declined to comment, one of the key sticking points revolves around who would lead the new company. There has been mounting pressure to name Volkswagen's CEO, Martin Winterkorn, the leader of the merged company, a move which likely doesn't sit well with Porsche.

Recently a source indicated that Porsche's heavy financing of the Volkswagen deal has put them in a tough situation which has resulted in them offering VW their car business, but so far that is unconfirmed.

Porsche is scheduled to meet today to discuss the recent breakdown in negotiations, so expect more news in the coming days.

 

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