Porsche and Volkswagon are to merge.

Car manufacturer Porsche and Volkswagon are to merge, as the related family management boards agreed to cooperate after months of takeover talks.

The German carmakers have announced that they plan to merge, bringing a sudden and dramatic end to a lengthy takeover attempt by the sports car manufacturer of its larger rival.

The members of the management boards of both Volkswagen AG and Porsche Automobil Holding SE had been in intensive talks about the deepening of the cooperation over the past weeks – and finally agreed to the creation of an “integrated car manufacturing group”.

A statement from Porsche said: “In the final structure ten brands shall stand below an integrative leading company alongside each other, whereby the independence of all brands and explicitly also of Porsche shall be ensured.”

Nine are owned by VW and the 10th is the Porsche sports car brand.

The family figures behind Porsche and VW – Wolfgang Porsche, its Chairman, and VW Chairman Ferdinand Piech – who are related, had rowed openly in recent weeks over how to bail out Porsche.

Managers, executives and works council representatives from both companies as well as representatives from the state of Lower Saxony, which has a stake of just over 20% in VW, were said to be planning to meet to shape the details of the company structure as soon as possible.

The news also comes after Chrysler recently filed for bankruptcy protection and Italian carmaker Fiat announced ambitions to combine with Chrysler and GM Europe operations to form one of the world’s largest car companies.