Volkswagen AG set out plans to raise as much as 10 billion euros ($14.9 billion) from shareholders, which analysts said would be enough to make fresh acquisitions as well as merge with Porsche.
Volkswagen, which has a market value of 43 billion euros, said on Friday it will seek clearance in December to issue up to 135 million new preferred shares by December 2014, a large portion of which could enter the market by the middle of next year.
News of the share issue plans, whose scale took some observers by surprise, followed comments by VW's powerful chairman last month hinting that Europe's largest automaker -- which had a global market share of 11.7 percent in September -- could expand its stable of brands to 12 from 9.
VW might look to extend its reach as a truckmaker by buying up remaining shares in German peer MAN AG, one analyst said.
VW is part-way through a multi-stage process to integrate with Porsche by 2011, and both companies have made several moves to shore up their balance sheets.
Based on the current price of Volkswagen's preferred shares, VW latest initiative could raise 10 billion euros. Assuming a 20 percent discount to the current price it would generate 8 billion euros, Credit Suisse analysts said.
By issuing preferred shares, VW avoids diluting the voting stakes of shareholders, which include Porsche with 51 percent and the German state of Lower Saxony with about 20 percent.
VW said the cash was needed to buy the sportscar business of Porsche, but authorization would give the firm additional headroom for further acquisitions, analysts at Credit Suisse said.
DZ Bank analyst Michael Punzet said the number of shares VW was seeking came as a surprise and suits a rumor that the company could make a bid for the MAN shares it does not yet own at 65 euros each .
VW holds a 29.9 percent stake in MAN and would be forced to make a mandatory takeover bid if the stake rose to 30 percent.
VW said the capital increase would also help it maintain its financial flexibility and safeguard its credit rating over the long term. VW currently has a rating of BBB+ at Fitch.
Volkswagen preferred shares fell 4.3 percent to 74.51 euros by 1125 GMT (7:25 a.m. EDT), while its ordinary shares were flat at 119.48 euros.
Porsche said in August it would sell a 42 percent stake in Porsche AG, its healthy sports car business, to VW for 3.3 billion euros ($4.9 billion) under the multi-stage integration .
VW's management had indicated that an initial rights issue could be for about 4 billion euros to add the Porsche marque as a 10th brand to its stable that already includes Audi, Bugatti, Bentley, Lamborghini, Skoda, Seat and Scania.
That capital increase could take place in the first half of 2010, VW said.
Porsche has also taken measures to bolster its finances following a backfired attempt to seize control of VW through a debt-financed takeover.
The company took on more than 10 billion euros in debt while buying a 50 percent VW stake and a package of derivatives for control over an additional 20 percent of VW stock.
Earlier this year, its controlling families approved plans for a capital increase of at least 5 billion euros. According to Reuters data, Porsche has a market value of 5.3 billion euros.
Porsche has already sold a package of cash-settled options on VW shares to the Gulf state of Qatar, which Porsche said would free up 1 billion euros in cash.
(Reporting by Eva Kuehnen and Edward Taylor; editing by John Stonestreet)