VW Takes Porsche Stake of 49.9 Percent

WOLFSBURG, Germany — Volkswagen AG has announced that, as expected, it has purchased a 49.9 percent stake in Porsche, which cost it the equivalent of $5.78 billion. The acquisition is part of a planned move toward a complete merger of the two companies, with Porsche as a brand in VW's stable, in 2011.

Volkswagen issued a statement saying the stake will "have a sustained positive effect on the earnings situation of the Volkswagen Group." Porsche is the world's most profitable automaker, according to VW, with a 10.3 percent return on sales, and the acquisition stands to bring VW an increase of more than $1 billion in annual operating profit "in the long term," the company said.

The stake purchase is the latest step in the long-running acquisition saga. Porsche CEO Wendelin Wiedeking, who had frequently clashed with VW chief Ferdinand Piëch, left the company in July. A comprehensive agreement for the plan was completed in August, and implementation agreements for the plan were signed last month. Only a few years ago, Porsche had ambitious intentions to acquire the much larger Volkswagen, but the plan ran into trouble when the global economic crisis squared off against massive debt Porsche had taken on in the attempt. Porsche called off the plan last spring, and the merger soon turned in the opposite direction.

Volkswagen will add Porsche to a group that already includes Audi, Bentley, Bugatti and Lamborghini as well as the more workaday Seat, Skoda and Scania marques.

Inside Line says: This is looking like the last act of a long-running soap opera. — Laura Sky Brown, Correspondent