Mike Stevens | Dec 8, 2009

FOLLOWING AN AGREEMENT reached in late July, Volkswagen has confirmed this week that it has taken a 49.9 percent stake in Porsche for €3.9 billion (AU$6.32 billion).

The merger follows a failed attempt by Porsche to acquire 75 percent of Volkswagen, leading to billions of euros in debt for the German carmaker.

In a statement, Volkswagen said Porsche "ideally complements the brand portfolio [and will] allow Volkswagen to further expand its position in the premium business, which offers particularly strong earnings".

"In turn, as an independent brand under the roof of the Volkswagen Group, Porsche will have the potential for significant additional growth," Volkswagen said.

"The transaction will have a sustained positive effect on the earnings situation of the Volkswagen Group. With a return on sales of 10.3 percent, Porsche AG is the world’s most profitable automobile manufacturer," the statement continued.

Volkswagen expects its annual operating profit to increase by €700 million ($1.13 billion) in the long term.

Volkswagen said it expects the merger to be finalised by 2011.

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