Following weeks of negotiations, Volkswagen has agreed to purchase a 42 percent stake in Porsche , totaling a $4.7 billion investment. The move will combine the two German automakers, likely under the revived Auto Union banner.
According to Automotive News, VW will complete its $4.7 billion investment in Porsche by the end of the year, with the two companies expected to be fully integrated by the end of 2011. Volkswagen’s current CEO, Martin Winterkorn, will act as the new head of Porsche and will likely oversee the combined company.
Porsche ’s failed takeover of VW earlier this year set the stage for the merge. Porsche fought over the last several months to takeover VW – Europe’s largest automaker – but would up with a mountain of debt totaling $12 billion. After the failed takeover, Porsche fired CEO Wendelin Wiedeking.
VW will finance the merger with a preferred share offering early next year. Despite the takeover, the Porsche and Piech families will remain the largest stakeholders in the new company.
