Volkswagen, Porsche Abruptly Drop Merger Talks

Volkswagen, Europe's largest carmaker, abruptly canceled planned merger talks with Porsche Monday amid a feud that marks the latest turn in a continuing power struggle between the auto giants.

Volkswagen, which was supposed to meet with Porsche to draw out merger plans Monday, issued a scathing statement, saying that it had "recognized ... that Porsche is lacking several fundamental conditions for the discussions."

It claimed that Porsche had no strategy for integrating the companies and was confused over its future.

But in a statement Sunday, Porsche insisted that the talks would continue.

"Solely the meeting scheduled for Monday was canceled," it said, expressing "irritations" with reports to the contrary.

Porsche, which owns more than 50 percent of Volkswagen, was forced to abandon an attempt to gain full control of the group when it hit financial difficulties.

Last year, surprise stake-building in VW by Porsche saw VW briefly become the world's largest company by market capitalization, as short-sellers, who had been betting on the stock price falling, rushed to close their positions.

The planned tie-up of the pair, which was announced this month, was supposed to create a German auto industry giant adding the Porsche name to VW's existing stable of brands including Audi, Skoda, Bentley and Bugatti.

But the talks quickly hit trouble with Volkswagen complaining that Porsche was "half-hearted" about the plans and jostling between the pair for pole position in the deal.

Click here for more on this story from the Times of London.