Volkswagen is Europe's largest auto producer in terms of sales volume.?[Photo/China Daily]

On July 4, Volkswagen announced it has agreed on a deal to pay €4.46 billion ($5.59 billion) for a 50.1 percent stake in Porsche by early next month, according to a Wall Street Journal report.

In 2009, Volkswagen, Europe's largest auto producer in terms of sales volume, bought an initial 49.9 percent stake in Porsche for the sum of €3.9 billion ($4.49billion). This acquisition has since been plagued by legal obstacles. Through this new takeover agreement, Volkswagen seeks to become the world's biggest carmaker.

Both German companies have stated they expect to complete the takeover on August 1 2012. Hans Dieter Poetsch, chief financial officer of Volkswagen, believes this accelerated integration will allow them to start implementing a joint strategy for Porsche's automotive business and to realize combined projects more quickly and smoothly.

Moreover, this agreement will unite two car giants: one is Ferdinand Piech, Volkswagen's powerful chairman and a member of the Porsche-Piech clan that controls Porsche; the other one is Ferdinand Porsche, grandson of legendary VW Beetle designer.

"We can cooperate even more closely and together create new opportunities for growth within the high-margin premium sector," Volkswagen Chief Executive Martin Winterkorn said in a statement. "Joining forces will make Volkswagen and Porsche even stronger-both financially as well as strategically."

On Thursday, Volkswagen and Porsche will hold a joint conference to outline the details of the newly-integrated Porsche brand in Wolfsburg, Germany.