Volkswagen is planning to drop the idea to collaborate with Porsche SE, who intends to grab the sports car segment alone.

The Porsche SE incurs an income of 1 billion euros from the sport car segment and led the segment by 20%. The German company Volkswagen was about to enter the deal with Porsche SE, unwillingly, just because the Company was being offered the complete hold of the business and an amount of 700 million euros was being paid.

Due to a number of legal risks, Volkswagen denied to enter into the deal on Thursday. The Company Porsche SE was already facing a lawsuit filed by the previous panel which controlled the business. The company had acquired a loan of 10 billion euros in order to purchase the VW.

The shareholders of VW have sued the Porsche SE, for hidingly piling up the VW shares, which resulted in incurring a loss of over a billion dollar on the part of the shareholders. Tim Schuldt, a Frankfurt-based analyst at Equinet AG, stated that, “We won’t see results on the suits until next year. Moving ahead with a merger in such an unpredictable environment would be the wrong thing to do”.

The preferred shares of Porsche SE dropped by 14%, whereas the shares of the VW witnessed a fall by 3.9% at the Frankfurt index.