Xinhua reported that the supervisory boards of Volkswagen and Porsche have ratified a merger deal between the two companies.

Under the agreement, Volkswagen will have a 42% stake in Porsche, Porsche's distribution centers in Austria will be sold to Volkswagen, and Volkswagen CEO Mr Martin Winterkorn will become head of both companies.

When merger related affairs finish by 2011, Porsche will become the tenth brand of the Volkswagen group. The new giant carmaker will remain headquartered in Wolfsburg.