updated 12/7/2009 12:38:39 PM ET 2009-12-07T17:38:39

Germany's Volkswagen AG said Monday it has bought an initial 49.9 percent stake in fellow car maker Porsche AG for $5.9 billion.

VW, based in Wolfsburg, had said it planned to make the purchase this week. It reiterated that it hopes to take over Porsche in full in 2011.

Volkswagen's other brands include Audi, Bentley and Skoda.

VW's shareholders last week approved plans to issue up to 135 million new shares to help finance the move.

The two companies initially announced their intention to merge in May, after a previous attempt by Porsche to take over the larger Volkswagen failed. Porsche, known especially for sportscars, is based in Stuttgart

The combination of the two companies "follows a compelling strategic, industrial and financial logic," which will result in tighter cooperation and synergies, Volkswagen said in a statement.

By bringing Porsche on board Volkswagen will be able to "further expand its position in the premium business, which offers particularly strong earnings. In turn, as an independent brand under the roof of the Volkswagen group, Porsche will have the potential for significant additional growth," Volkswagen said.

"As a result, the annual operating profit of the Volkswagen group is expected to increase by some 700 million euros in the long term," according to Volkswagen.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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