Porsche board agrees to VW tie-up (Roundup)

Nov 20, 2009, 17:43 GMT

Berlin - Luxury German sports carmaker Porsche said Friday its board had agreed to the group's planned integration into Volkswagen AG, Europe's biggest auto manufacturer.

The decision by the Porsche supervisory board came after German-based VW's supervisory board agreed to the contracts paving the way for its planned takeover of the legendary sports car group.

The next big step in the merger of the two carmakers will come at the end of 2009 when VW acquires a 49.9 per cent stake in Porsche at a cost of about 3.9 billion euros (5.8 billion dollars). The integration of the two groups is expected to be completed in 2011.

VW said in a statement that its board had signed off on Thursday the contracts setting out details of the two carmakers' tie-up.

Under the deal, Stuttgart-based Porsche's core sports car operations are to be integrated into VW as its 10th brand.

Earlier in the day, VW unveiled a 25.8-billion-euro investment plan in the coming three years.

The move came as the group also said it was acquiring the insolvent German auto parts group Karmann.

Announcing its move to takeover Karmann, VW said it plans to form a new subsidiary.

Of the 25.8-billion-euro investment plan, investments in property, plant and equipment will account for 19.9 billion, half of which will be invested in Germany alone, VW said.