Porsche to Merge with Volkswagen

A merged entity would have 10 separate auto brands under one management group.

Porsche announced on May 6 it would merge with its fellow German auto firm Volkswagen, more than three years after first making a takeover bid for it.

A joint task force of both companies will work on setting up a merged entity, which would have 10 separate auto brands under one management.

Stuttgart-based Porsche already holds a majority stake in Volkswagen (VW) and made an audacious takeover bid for it three-and-a-half years ago. Press reports had said last week that VW was considering a counter bid for Porsche.

VW is by far the bigger company, with the biggest sales of any car firm in Europe -- 15 times larger than its smaller German peer, which is nine billion euros (US$11 billion) in debt.

The Porsche parent group owns a little more than 50% of VW after having boosted its stake in January, and had aimed to raise its stake to 75%.

The German state of Lower Saxony, which has a one-fifth stake in Volkswagen, will take part in the task force as well as employees' representatives.

Copyright Agence France-Presse, 2009

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