Porsche takes over Volkswagen

FRANKFURT: The German luxury sports car maker Porsche has taken over Volkswagen, the biggest European car maker, by purchasing more than 50 per cent of its shares.

Porsche said in a brief statement that by buying new VW shares, it "will thus increase its participation to 50.76 per cent "of the group's capital, compared with 42 per cent before.

As a result, Porsche is now obliged by Swedish law to make an offer for outstanding shares in the heavy truck maker Scania, in which VW is the dominant shareholder.

But the German sports car company will offer a minimum price for Scania shares, and has no "strategic interest" in the company, the statement said.

Porsche had initially planned to acquire more than 50 per cent of VW's stock last year but was forced to delay the operation after the value of the shares soared amid frantic stock market speculation.

At one point, they traded for more than $1,350 per share, making VW briefly the biggest company in the world by stock market valuation.

On Monday, VW shares closed at 254.74 euros, close to the range Porsche had set for itself of between 200-250 euros.

Porsche, which makes the 911 sports car and Cayenne sports utility vehicle, plans to raise its stake in VW to more than 75 per cent this year, which would give it total control over the group