Porsche turns down VW offer

STUTTGART, Germany, June 29 (UPI) -- German automaker Porsche turned down an offer from Volkswagen Monday that would have transferred 49 percent of its sports car unit to its larger rival.

Porsche said a financial penalty attached to the offer made the deal "unfeasible," The New York Times reported Monday.

The sale of Porsche A.G., its sports car business, for about $5.6 billion "would immediately trigger repayment of $17.6 billion" on a loan, Porsche spokesman Frank Gaube said.

The merger was planned in two steps. The first step involved Porsche Automobil Holding to sell 49 percent of Porsche A.G. The second step involved the Qatari Investment Authority's purchase of options that would allow it to buy 20 percent of Volkswagen.

The deal would also have been a reversal of strategies for Porsche, which has a debt of $12.6 billion built up from its attempt to take over Volkswagen.

Porsche Automobil Holding owns 100 percent of the Porsche A.G. and 51 percent of Volkswagen, the Times said.