The supervisory board of Volkswagen is set to approve on Thursday contracts drafted for a merger with indebted parent Porsche SE and the partial acquisition of Porsche's sports car business, sources close to the matter told Reuters.

Three people with direct knowledge of the talks said on Monday that the VW board would sign off on the documents, said to consist of several thousand pages.

On Friday, Porsche's two controlling families would then sign the contracts.

Volkswagen could not be reached for a comment, while a spokesman for Porsche only said that its supervisory board was holding an extraordinary meeting on Friday.

(Reporting by Jan Schwartz, Writing by Christiaan Hetzner)