The acquisition of Porsche’s sports car business by Volkswagen has moved into its final stages with agreement by VW to buy the 50.1% stake it doesn't already own for EUR4.46bn (US$5.6bn).

The move ends a long-running saga which first saw Porsche Automotive Holdings try to envelope its much bigger rival before the onset of economic crisis turned the whole deal on its head.

The twists and turns have also divided two of Germany's most powerful automotive families.

VW said last night it was able to proceed with the transaction after reaching an agreement with German tax authorities.. The cash deal is based on an equity value of EUR3.88bn and also includes what the Porsche holding company would have received in dividend payments and half of the forecast synergies from the combination.

The agreement means the Porsche sports car business can be integrated into VW’s stable of brands.

The two companies agreed to combine in 2009 after Porsche racked up more than EUR10bn of debt in an unsuccessful attempt to take over VW.

VW chief executive officer Martin Winterkorn said in a statement: "We can now cooperate even more closely and jointly leverage new growth opportunities in the high-margin premium segment. Combining their operating business will make Volkswagen and Porsche even stronger - both financially and strategically - going forward."

The Porsche business will to be fully consolidated in VW’s accounts from 1 August.

Last year the two companies scrapped plans for a full merger with the Porsche holding company, which is controlled by the Piech-Porsche family and still owns 50.7% of VW's common stock, because of lawsuits against Porsche in the US and Germany over the failed VW takeover.

The deal announced yesterday allows VW to purchase Porsche's automotive business without having to pay the taxes associated with exercising a put-call option it had to buy the stake.

Porsche's attempt to take over VW started in 2005 and with it a family feud which saw Ferdinand Piech, VW's chairman, crossing his cousin Wolfgang Porsche to thwart the plan, which ultimately fell apart after Porsche's debt rose in the midst of the financial crisis.

Piech, 75, the former VW CEO, has since strengthened his position at VW with his wife, Ursula, taking a seat on the company's supervisory board earlier this year. In April, VW agreed to acquire Italian motorcycle maker Ducati, fulfilling Piech's vision of a company portfolio spanning two-wheelers to 50-tonne trucks. VW also controls truck makers MAN SE and Scania AB.

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