Volkswagen has agreed a deal with Porsche to buy a 42 per cent stake in the German sports car maker.
VW will initially pay up to 3.3 billion euros (£2.85bn) for the stake and a full merger between the two manufacturers is expected by the end of 2011. VW’s CEO Martin Winterkorn has been named as head of Porsche's holding company Porsche SE.
Winterkorn said the deal marked "a new era" for both companies.
“Volkswagen and Porsche today took a decisive step towards a joint future,” he said. “As a group with now 10 strong, independent brands we will further expand our unique global position. More than ever before, we now have what it takes to become the automotive industry’s number one.”
Winterkorn promised the independence of Porsche would remain and the new group could also take the Auto Union name.
“I am convinced that the outcome of this integration will be the best vehicles for our customers, secure jobs and the creation of long-term value for our shareholders,” said Winterkorn.
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