The largest automaker in Europe – Volkswagen AG – is about the get a bit bigger.

VW will pay 3.3 billion euros (4.7 billion dollars) for Porsche with the plans that they will merge completely by late 2011.

Porsche tried to overtake VW to gain access to technologies and parts to help it meet the looming fuel economy and emissions regulations, but took on 10 billion in heavy debt during the process.  This forced Porsche to reconsider the scenario and ask for help from Volkswagen.

VW already supplies a vast amount of equipment to Porsche, including bodies for the Panamera and Cayenne.

To afford the purchase, VW plans to offer preferred shares in 2010.  Porsche will now join Audi, Lamborghini, Seat, Skoda, Bentley and Bugatti.

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