Volkswagen planned to complete a merger with Porsche in 2011. Porsche originally planned to buy Volkswagen by securing stock options, only to see its debt levels surge.
"It can't be ruled out that the legal proceedings may drag on for some time to come until a final decision is reached. For that reason, the planned merger could possibly be delayed," Winterkorn, who also heads Porsche's board, said, according to Bloomberg News. "We're still facing a tax-related hurdle and several legal obstacles."
German tax authorities are also negotiating with the company about the tax-exempt status from Porsche's options transactions. If the two companies merge before 2014, it could lead to higher taxation.
If the planned merger fails, there is the possibility that Volkswagen will increase its 49.9% stake in Porsche or switch to a put/call structure whereby Porsche sells its car-making assets to Volkswagen for cash.