VW Purchase of Porsche is Official

Over the past few months, there has been endless coverage of the Volkswagen-Porsche purchase drama. Back and forth about VW's plans for the brands, how much it would be bought for, and the like.

When Porsche CEO Wendelin Wiedeking it was clear the only thing standing in the way of a purchase was gone. Porsche has taken a 49.9% stake in Porsche, costing $5.78 billion.

The 49.9% is still below 50% majority threshold, but VW plans to buy the rest on the way to a complete merger of the two companies in 2011. $5.78 billion is a higher price than VW expected to pay originally, and a sign of how valuable Porsche really is.

While Porsche's financial arm (responsible for the ill-fated attempted purchase of VW) is losing money, the automotive unit (you know, the one that actually makes cars) is still extremely profitable, even throughout the recession. The brand's profit margin of 10.3% is unheard of in the automotive industry.

VW says it expects "significant synergies" to result from the deal, and you know what that means - likely sharing between the two. Those savings should result in a combined profit increase at the Volkswagen Group of 700 million euros (about $1.03 billion USD at current exchange rates). Sounds like a good deal - for VW.