Citing tough global market conditions, VW said the acquisition had been brought forward to begin increasing economies of scale.
VW chief executive Martin Winterkorn said the move will “significantly strengthen Volkswagen and Porsche, and further expand the group's product portfolio with fascinating new vehicles”.
VW paid 4.49 billion euros for a 50.1 per cent stake in Porsche, taking its ownership stake to 100 per cent. The deal ends a seven-year saga between the two firms, which was instigated in 2005 when Porsche started acquiring VW shares.
Porsche is now the 12th brand in VW's stable. VW's stated aim is to become the world's largest car maker by 2018.