Tax and legal hurdles still remain as well as Porsche holding company's heavy debt burden being an obstacle to the completion of the merger.

It's been talked about for years but the Volkswagen takeover of/merger with Porsche is still not a done deal.

The Wolfsburg-based VW Group is facing tax and legal problems in its planned merger with Porsche, much of it due to Porsche Holding SE's, the Porsche brand's parent company, heavy debt burden. Porsche SE will need a large cash infusion before being healthy enough for a proper merger.

Volkswagen AG currently owns 49.9 percent of Porsche cars while Porsche SE owns the remaining 50.1 percent.

"Volkswagen remains totally committed to the Comprehensive Agreement and to the merger with Porsche. However, the tax and legal hurdles still to be overcome on the way are not insubstantial," said Volkswagen AG CEO Martin Winterkorn on Thursday.

Winterkorn is also CEO of Porsche SE.

Getting control of Porsche and maximizing synergies between the two automakers is essential to VW meeting its goal of being the world's largest automaker by 2018 and selling more than 10 million units a year. Porsche is a successful brand with large profit margins and the two companies have already planned many projects as a part of a €700 million ($971.1 million) investment per year in shared synergies.

Winterkorn says that the planned infusion of €5 billion ($6.9 billion) for the first half of 2011 into Porsche SE is proceeding on schedule.

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