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BERLIN: Volkswagen has said its supervisory board had cleared the way for its planned takeover of sportscar maker Porsche, as Europe’s biggest carmaker ratcheted up the quest to become world number one.

The German giant said in a statement that its supervisory board had approved the contracts determining details of the complex tie-up. Porsche’s board was expected to follow suit.

The announcement came as VW also said it would invest about €25.8 billion ($39 billion) in factories, materials and vehicle types by the end of 2012.

Most of the funds, €19.9 billion, will be allotted to production and equipment sites, with VW aiming to overtake the number one auto maker, Toyota of Japan, by 2018.

The company said it wanted to “modernise and expand its product line’’ and to enter “new markets and sectors’’.

Volkswagen also plans to invest €4.4 billion in China, the world’s largest auto market, by the end of 2012 through joint ventures.

Porsche’s approval of the VW deal is expected to draw a line under a fierce power struggle between the two automakers in recent years that counts Porsche’s former boss Mr Wendelin Wiedeking and its finance chief as casualties.

Porsche initially tried to acquire its much bigger German peer, but it ran out of funding as the financial crisis seized up credit markets. VW is now driving the deal, which is expected to be completed in 2011. — PTI

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