BERLIN - LUXURY sports car maker Porsche announced on Wednesday it would merge with its fellow German auto firm Volkswagen, more than three years after first making a takeover bid for it.

Porsche made the announcement in a statement released after a meeting of managers from both companies in Salzburg, Austria.

Porsche already holds a majority stake in Volkswagen (VW) and made an audacious takeover bid for it three-and-a-half years ago. Press reports said last week that VW was considering a counter bid for Porsche.

VW is by far the bigger company, with sales 15 times larger than its smaller, heavily indebted German peer. -- AFP