Porsche, the German luxury sports car-maker, has put itself in the driving seat to control one of the world's biggest auto industry groups by preparing to spend 10 billion euros raising its stake in Volkswagen to more than 50 per cent.
Its long-awaited move came shortly after VW spent 2.9 billion euros to seize majority control of Swedish truck-maker Scania, buying a 31 per cent stake from the powerful Wallenberg family and its Investor investment vehicle.
The twin moves herald the formation of a global empire to rival and even surpass Toyota and General Motors, with vehicles ranging from high-powered sports cars through family saloons to lorries.
Porsche said it had been given the green light by an extraordinary session of its supervisory board to raise its current 31 per cent holding in Europe's largest car-maker.
It insisted that its effective takeover would not result in a merger of the two companies which would sit under a new entity formed last year, Porsche SE (Societas Europaea - or European company).
"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 sharply increased international competition," Porsche chief executive Wendelin Wiedeking said. The new "fair and friendly" partnership would write a new chapter in car history.
Mr Wiedeking, who has transformed Porsche in the past 15 years from a near-bankrupt company to the world's most profitable auto concern, said only last month, when Porsche extended a 10 billion euros credit facility, it did not plan to take over VW.
He said it was now seeking regulatory clearance to win majority control - and this would take months. Legally, Porsche is not forced to mount a full-scale bid as it made an offer last year which was pitched so low few VW shareholders, if any, took it up.
The company, controlled by the family of VW chairman Ferdinand Piech is clearly awaiting the outcome of a battle within the cabinet of German Chancellor Angela Merkel over how to amend the so-called 1960 VW Law that limits voting rights at Volkswagen to 20 per cent.
The European Court of Justice struck the law down last year as incompatible with EC treaties but some German ministers are trying to get round that ruling.
The German state of Lower Saxony, VW's second-biggest shareholder with 20.1 per cent of the votes in Europe's biggest automaker, said it would keep its stake and continue to play an active role as Porsche's partner. VW's unions are up in arms about Porsche's plans to slash their influence on the SE holding company's supervisory board.
VW welcomed the move which is designed to ward off foreign predators from Germany's biggest auto group. VW provides about a third of the contents of Porsche cars.
The moves also bear the hallmarks of Piech, scion of the Porsche founding family, who has promoted the merger of VW's truck business with that of Scania and MAN, the German group in which VW holds 29.9 per cent, to build a rival to Volvo and Daimler.
