Europe's largest automaker, Volkswagen, and Porsche announced today that they reached an agreement to merge their operations to create an integrated automotive group led by VW. Under the agreement, Volkswagen will buy a 42 percent stake in Porsche's automotive unit by the end of 2009. The merger which will see the creation of a group with 10 brands, sales of around 6.4 million vehicles and more than 400,000 employees, will be achieved in several stages, and is expected to be completed by 2011.According to VW, Porsche will remain an independent company headquartered in Zuffenhausen. "As is the case today with Audi and other successful group brands, Porsche will retain its identity, while at the same time benefiting from its membership of the integrated group," said VW in a statement.
"Volkswagen and Porsche today took a decisive step towards a joint future. As a group with now ten strong, independent brands we will further expand our unique global position," said Martin Winterkorn, Chairman of Volkswagen's Board of Management.
"More than ever before, we now have what it takes to become the automotive industry's number one. Volkswagen is systematically continuing its successful multibrand strategy by integrating Porsche. Additional new growth opportunities will emerge for Porsche under the umbrella of the integrated group," Winterkorn added.
Interestingly, it was Porsche that had been trying to take over Volkswagen that past few years as the Stuttgart sports carmaker had built a 51 percent stake in the German group and was aiming to increase it to 75 percent.
However, at the same time Porsche built a debt of nearly 10 billion euros or around $14 billion US as the automotive market was hit by the ongoing financial crisis, leading to the departure of Porsche CEO Wendelin Wiedeking and forcing the company to seek help from VW.
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