AFP reported that German car giant Volkswagen has proposed a system of cross ownership with rival Porsche leading eventually to a merger between the two companies.

As per report, VW has asked Porsche board to agree to the scheme drawn up by Volkswagen boss Mr Martin Winterkorn and Porsche co owner Mr Ferdinand Piech. Porsche currently holds 51% of Volkswagen, where Piech is head of the supervisory board, while ownership of Porsche is concentrated in a holding divided between the Porsche and Piech families.

Under the proposed scheme, VW would take over 49.9% of Porsche, with the remainder staying in the hands of the Porsche holding. Ultimately, the Porsche and Piech families would have more than 40% of the merged company, Lower Saxony 20%, the Gulf state of Qatar, which is currently in talks with Porsche, 15% and an unspecified other state fund 5%.

(Sourced from AFP)