Volkswagen And Porsche Logos
England's High Court blocked a car-hacking study that would have revealed a security flaw in a computer chip used by Volkswagen to encryption keys. Reuters

Volkswagen AG (Frankfurt: VOW) will complete its long-sought purchase of Porsche Automobil Holding SE (Frankfurt: PAH3), following years of on-again, off-again courtship between the two companies.

The unique Porsche brand will now become an integral part of the Volkswagen Group. That is good for Volkswagen, good for Porsche and good for Germany as an industrial location, Volkswagen chairman Dr. Martin Winterkorn said Wednesday.

Completing the merger between the two companies should improve Wolfsburg-based VW's 2012 financial results by €9 billion while decreasing liquidity about €2.5 billion.

Volkswagen and Stuttgart-based Porsche signed an agreement in 2009 to merge the two companies, but the deal was on the rocks in September, when the companies put it on hold as they sought to avoid paying the more than €1.5 billion in taxes that would be due. However, reports emerged in mid-June that VW and Porsche were planning on accelerating the merger and that VW would eat additional expenses to complete its acquisition of the remaining 50.1 percent of Porsche.

The accelerated integration will allow us to start implementing a joint strategy for Porsche's automotive business more quickly, VW CFO Hans Dieter Potsch said.

Porsche's primary challenge is maximizing production capacity now that sales volumes are up as much as 20 percent, according to Reuters. VW's enormous manufacturing capacity and its ability to assemble Porsche cars should help make up production shortfalls.

The current €4.46 billion plus-one share deal should allow the merger to classify as a restructuring under the German reorganization tax law, which should subsequently allow the companies to avoid some taxes on the transaction. The 2009 merger agreement between VW and Porsche came after the latter accrued more than €10 billion trying to buy VW, according to Reuters.

However, despite the merger workaround, VW will still likely wind up paying €100 million in taxes, Poetsch told reporters at a press conference Thursday. The tax expense will be more than offset, though, by annual cost savings of €700 million and the removal of roughly €2 billion in debt from Porsche's balance sheet.

Volkswagen AG (Frankfurt: VOW) shares rose 5.82 percent to €127.16 Thursday. Porsche Automobil Holding SE (Frankfurt: PAH3) shares fell 1.52 percent to €41.29.