Volkswagen, Porsche Merger Talks Suspended Amid Spat

The two sides have been at loggerheads following comments by VW that Porsche had to cut its debt mountain valued at $12 billion before a deal could be sealed.

Merger talks between Europe's biggest carmaker Volkswagen and Porsche were suspended on May 17, amid a rift between the two German auto giants.

There is currently "no clear constructive attitude" on the part of Porsche, a Volkswagen spokesman said. "Therefore there is no point in having further talks at the moment," he added.

Dialogue between the two parties had been "suspended," he said.

For their part, Porsche played down the rift. "The negotiations, which began last week, are continuing in a completely normal fashion," the firm said.

The two sides have been at loggerheads following comments on May 14 by Ferdinand Piech, head of VW's supervisory board. He said Porsche had to cut its debt mountain -- valued at roughly nine billion euros (US$12 billion) -- before any merger.

The two auto giants agreed on May 6 to begin merger talks, giving themselves four weeks to agree a tie-up.

Copyright Agence France-Presse, 2009

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