The return of Auto Union?

The iconic Auto Union name could be resurrected as part of the Volkswagen Group's takeover of Porsche. During an extraordinary board meeting overnight the company agreed to pay €3.3billion for a 42 per cent stake in Porsche SE.

Such a deal would mean 10 brands under the Volkswagen Group umbrella leading to speculation that the Auto Union name may make a comeback; although there has been no official comment from VW. It was originally used when Audi, DKW, Wanderer and Horch came together in the 1932 resulting in the famous four-ring badge now associated with Audi.

Ironically, the famous Auto Union grand prix cars of the 1930s that are considered integral to Audi's brand DNA were designed by Dr Ferdinand Porsche.

Under the terms of the deal Porsche will sell its options on Volkswagen to investors in Qatar as the first stage in the operation. According to the VW press release those negotiations are well advanced and should be completed in time to allow the transaction between VW and Porsche by the end of the year.

The next step would be Volkswagen's takeover of Porsche Holding Salzburg, a separately owned dealer network valued at €3.55billion, in 2011.

Volkswagen CEO Martin Winterkorn (pictured) said the deal would allow both sides to secure jobs and increase growth and earning capacity.

"We want to write a new chapter in a history of sustainable growth," Winterkorn said. "This will help us safeguard high-quality jobs in Germany for the long term and create new ones."

Hans Dieter Pötsch, Volkswagen CFO was equally pleased with the arrangement.

"It combines the greatest possible degree of certainty that the transaction will run smoothly with the creation of a stable ownership structure, a fair price and very solid financing," he said. "It also reflects the interests of all parties and safeguards Volkswagen's solid financial position and strong rating."

Interestingly, despite insistences that Porsche would retain its own separate identity the statement indicated Volkswagen was eager to implement "timely realisation of the potential synergies" between Porsche and its new masters.

The Germany state of Lower Saxony will retain its 20 per cent stake in VW as part of the deal, making it the second largest shareholder ahead of Qatar.

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