Porsche and Volkswagen automakers agree to merger

Porsche and Volkswagen family owners agreed on Wednesday to merge the companies, creating one large “integrated car-manufacturing group”.

"In the final structure, 10 brands shall stand below an integrative leading company alongside each other, whereby the independence of all brands and explicitly also of Porsche shall be ensured," said the Porsche Automobil Holding SE company.

A task force has been set into place to discuss details of the merger over the next month. This task force embraces managers and representatives from the works council of both companies as well as the state of Lower Saxony.

Porsche based in Stuttgart, Germany was previously controlled by the Porsche and Piëch families voting stock.

Porsche had previously tried to raise its 51% shares in Volkswagen to 75% in a take-over bid. A special German law grants Lower Saxony enough power to veto decisions with its 20% share in the VW company.

"I'm certain that we can and will advance our partnership in the difficult current year 2009, [and] have the stuff to develop the powerhouse of the international automobile industry" said Martin Winterkorn chairman of the Volkswagen Group (Volkswagen AG) and Scania AB.

The merger would help Porsche with its €9 billion debt which it incurred partially due to the ailing economy as well as its attempt at a takeover bid.