Mike Stevens | May 7, 2009

Porsche has finally abandoned plans to acquire a larger share of Volkswagen, of which it already owns 51 percent. Instead the two German companies have revealed plans to merge into one integrated company within four weeks.

Currently the VW Group and Porsche are managed independently of each other. Under the merger, 10 brands will be managed by one management board.

porsche-beetle

The decision to merge the two companies comes after Porsche’s attempts buy up to 75 percent of VW, for a controlling share, have been repeatedly blocked.

Volkswagen has welcomed the merger and already representatives from Porsche and VW are in discussions about the form of the new company.

The State of Lower Saxony, where VW is based, is also taking part in discussions. As a 20 percent stake holder in VW they have the power to veto strategic decisions.

Under the new company, VW’s nine brands: Volkswagen, Volkswagen Commercial Vehicles, Scania, Škoda, Lamborghini, Bentley, Bugatti, Seat and Audi will each maintain a unique sense of identity. Porsche will also maintain its identity.

The new entity will allow Porsche greater access to technology and systems from the Volkswagen catalogue, not that it’s been lacking in that department so far.

Both companies can now get back to their primary business of building cars.

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