BERLIN, Feb 28 — Volkswagen made no decision at a supervisory board meeting yesterday on how to combine with Porsche, a high-ranking official said, as the carmaker seeks to avoid being hit by a billion-euro tax bill in the process.
“There is a firm commitment on the part of VW to reap synergies as quickly as possible but not at all costs,” the official told Reuters.
VW faces having to pay about €1 billion (RM4 billion) in tax if it were to buy the remainder of Porsche’s automotive business before 2014 and as a result it is possible that VW may put off the purchase until 2014, the official said after the board met at VW’s headquarters in Wolfsburg.
VW, which also owns luxury car brand Audi and Czech unit Skoda Auto, already owns 49.9 per cent of Porsche’s car-making operations. Last September the company dropped plans for a full merger by the end of 2011 after lawsuits against Porsche in the United States and Germany complicated the sports-car maker’s valuation.
“The tax burden is the key stumbling block, there is quite a bit of homework left to be done,” the official said.
A banker familiar with the matter said he believed VW would commit to setting up a special holding company to complete the transaction, which would enable it to buy the other half of Porsche’s automotive operations more rapidly while avoiding tax payments.
Volkswagen spokesman Marco Dalan declined to comment while spokesmen at Porsche didn’t return calls seeking comment. — Reuters