Porsche to increase stake in VW

Luxury car-maker Porsche is planning to increase its stake in Volkswagen AG to more than 50 per cent to become the majority shareholder.

Based on the current stock exchange price of approximately €150 (£114) per ordinary share, the acquisition of a further 20 per cent in VW corresponds to an investment of almost €10 billion (£7.65 billion), Porsche said in a statement.

But there are no plans to merge the companies, the company added.

Wendelin Wiedeking, chief executive of Porsche, said: "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."

Mr Wiedeking added Volkswagen and Porsche will in future "be able to write a new chapter in automobile history, working together in a partnership based on fairness and collegiality."

After the transaction, subject to regulatory clearance, representatives from Volkswagen will become members of Porsche's board.

Shares in Porsche rose as much as six per cent on the news and were up 3.2 per cent at €117.20 in late afternoon trading, while VW's stock rose 1.5 per cent to €152.19.