Porsche is to merge with Volkswagen creating a European auto-giant.
The announcement was made on Wednesday after weeks of talks between the German car makers.
Porsche said the move would bring 10 brands under one roof. Nine of the brands are owned by VW and the other is the Porsche sports car brand.
Further talks are to be held between the two companies, VW's home state of Lower Saxony and employee representatives.
In January, Porsche announced it had increased its stake in Volkswagen to more than 50% and said it planned to lift its stake in VW to 75%.
