Volkswagen, EuropeÔÇÖs biggest carmaker, is to pay ┬ú2.8 billion (Ôé¼3.3 billion) for a 42 per cent stake in Porsche's main production division, bringing the two German companies one step closer to full integration.
VW will also buy the automobile trading business of family-owned Porsche Holding Salzburg, Europe's biggest vehicle dealer.
VW and Porsche are seeking to complete the merger and become one combined European automotive giant by 2011.
Porsche is planning to sell most of its options over around 20 per cent of VW's shares to the Qatar Investment Authority, which will make Qatar the third-largest investor in the combined company.
The resulting company will have 10 brands. VW already owns, among others, Audi, Bentley, Skoda and Lamborghini.
VW has said that to finance the purchase, it is planning a capital increase of preference shares in the first half of 2010.
The merger comes at the end of a long struggle between the two companies, which led to the departure of PorscheÔÇÖs chief executive, Wendelin Wiedeking.
Porsche had originally sought to take over Volkswagen but its attempt backfired after it took on debt of more than Ôé¼10 billion, forcing it to seek help from VW.
 
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