A deal to merge Volkswagen and Porsche is near collapse, according to reports across the automotive industry.

The two year ongoing battle has come across stumbling blocks and obstacles recently, in form of legal tangles and tax complications.

Action needed fast

Volkswagen themselves have clearly indicated that they don’t want the deal to drag on. If the deal does take too long to finalise it would naturally create uncertainty and worry. Hans Dieter Poetsch, the Chief Financial Officer of Volkswagen as well as Porsche, echoed these concerns by saying “It’s obvious that the desire is great not to wait too long”

Juergen Pieper, an Analyst for Bankhaus Metzler, hinted action should be taken soon in order for clarity to be reached. He said

“The future structure of VW-Porsche has been hanging over their heads for some time,”

“It’s in VW’s best interest to achieve clarity on how to proceed.”

Frank Schwope, an analyst who works for NordLB, gave his viewpoint on the matter saying that this would perhaps be the best way forward.

“A straightforward purchase of Porsche’s operations would seem the smoothest path for VW”

Marc Rene Toon has raised concerns about the deal taking so long to be finalised.

“We’re looking at a disorderly process toward bringing about the integrated carmaker,”

“There’s not the slightest bit of doubt on behalf of VW and Porsche that they will and should combine. But more than two years after making that pledge, they still haven’t achieved their goal.”

His concerns are clearly justified. The fact that the deal has taken so long will bring about many throughout the industry will be worried the deal may never occur.

Alternative option

One option that has been floated about is that of Volkswagen buying out Porsche’s car making section of the business rather than merge the two companies.

This may happen as the deal is dragging on.

At the moment, both Volkswagen and Porsche have a significant stake within one another’s company. Volkswagen already holds 49.9% of Porsche whereas Porsche hold the majority share of Volkswagen’s stock.

If the deal goes ahead, will Volkswagen and Porsche overtake General Motors and Toyota as the world’s biggest merging companies?

The deal can help Volkswagen finally overtake Toyota as the world’s number one car producer a bit quicker than the 2018 date that was originally pencilled in?