Volkswagen, which will pay 3.3 billion euros for 42 per cent of Porsche’s automotive unit as a first step in the merger, will issue as much as 4 billion euros in new preferred shares in the first half of 2010 to help fund the purchase, Poetsch said on Friday at a news conference at VW headquarters in Wolfsburg, Germany.

The combination would end a four-year feud for control that led to Porsche amassing at least 10 billion euros in debt to buy a 51 percent holding in Volkswagen, its biggest supplier, in a failed takeover attempt. Porsche halted the effort to acquire VW in May, and the companies outlined plans last month for a transaction that would also include investments by Qatar.

“The merger seems kind of odd because the companies work together anyway, so they clearly don’t need to own one another to work together,” said Stephanie Brinley, an analyst at AutoPacific Inc. in Troy, Michigan. “The story reads like a personal war instead of a strategic purchase, but that doesn’t mean VW can’t make it work.”

Volkswagen Chief Executive Officer Martin Winterkorn will take the CEO post at Porsche and Poetsch will become head of finance there as of September 15, the Stuttgart, Germany-based maker of the 911 sports car said yesterday. Porsche CEO Wendelin Wiedeking and Chief Financial Officer Holger Haerter stepped down on July 23 when the companies agreed to merge.

The combination, which the companies aim to complete sometime in 2011 will boost operating profit by 700 million euros annually, Volkswagen said yesterday. Poetsch said on Friday that the transaction still requires “much work.” The Qatar Investment Authority would take a 17 per cent stake after buying options that Porsche holds for additional stock in VW, and the state-owned fund would also acquire a holding in Porsche that the companies haven’t yet specified, according to plans announced last month. Winterkorn said yesterday that Qatar will be a “strong partner.” Poetsch declined on Friday to comment further because talks are continuing with the emirate.

Qatar would become the company’s third-largest shareholder after Porsche and the German state of Lower Saxony. The Porsche and Piech families who control the sports-car maker’s voting stock would have a stake of 35 per cent to 39 per cent in the merged company, the CFO said.

Employees are considering taking a 1 per cent to 5 per cent stake, Bernd Osterloh, VW’s chief labour representative, said at the news conference. Lower Saxony, which owns 20 per cent of Volkswagen, would maintain its holding at that level, the carmaker said yesterday. Executives have said that the combined company will eventually overtake Toyota Motor Corp., the world’s biggest automaker, in sales and profitability.   —