VW and Porsche drive nearer to merger

GERMAN auto maker Volkswagen AG yesterday said its supervisory board had approved certain agreement contracts for the planned merger with German sports car builder Porsche, taking them one step closer to completing the deal.

The contracts set out the organizational, structural and legal details of the agreement which was first announced in May and which is hoped to be concluded in 2011.

The next step of the process will be VW shareholders approving that the company take on a 49.9-percent stake in Porsche AG through the issuance of new shares. An extraordinary VW shareholders' meeting is planned for December 3 to take a vote on that issue.

"The creation of an integrated automotive group with 10 strong brands follows a compelling industrial logic," Wolfsburg-based VW said.

"It represents a unique opportunity for Volkswagen and is in the best interests of all shareholders. Volkswagen will further expand its position as the leading global multi-brand group with the inclusion of Porsche AG and the automobile trading business of Porsche Holding Salzburg," it said.

VW, Europe's largest car maker by sales, said last month it would take an initial 49.9-percent stake in Porsche AG, based in Stuttgart. VW said it would pay 3.9 billion euros (US$5.9 billion) for the stake.

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