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Last Updated: Monday, 3 March 2008, 22:07 GMT
Porsche set to buy control of VW
Porsche

Porsche has said it will take a controlling stake in Volkswagen, in a deal that is potentially worth almost 10bn euros ($15.2bn, 7.7bn).

The maker of the luxury 911 sports car already holds 31% of VW shares. On Monday, its supervisory board agreed to raise the stake to above 50%.

In a separate deal, Volkswagen said it will buy a controlling stake in Swedish truck maker Scania for $4.4bn.

The two deals will create a huge auto business under Porsche's control.

Strong influence

But Porsche says it is not planning to merge with Volkswagen.

"Our aim is to create one of the strongest and most innovative automobile alliances in the world, which is able to measure up to the increased international competition," Porsche chief executive Wendelin Wiedeking said.

Porsche has argued that it needs a strong influence at VW, which makes components for a third of Porsche cars.

Regulators will look at the deal over the next few months.

Porsche's move was made possible by a ruling by Europe's highest court last year, which rejected a German law that limited shareholdings in VW.

Volkswagen's second biggest shareholder, the state of Lower Saxony, said it would keep its 20% stake.

The German government is debating a law that would help Lower Saxony and workers maintain their influence at Volkswagen, which is one of the nation's biggest employers.

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