Porsche cleared to swallow VW

The EU Commission has given the green light for the world's most profitable carmaker to take over Europe's biggest one.

News that Porsche can now swallow Volkswagen came on the day VW reported a profits spike that took the stock market by surprise.

The group posted a 31% gain in first-half net profit on strong sales in emerging markets, pushing its share price above 200 for the first time.

As the numbers clicked higher on the Dax index in Frankfurt, a statement came from Brussels that a Porsche takeover "would not significantly impede effective competition."

Porsche has said since early March that it planned to take over Volkswagen, and has been waiting for the approval of various competition authorities.

Earlier this month, it said it wanted to build up its VW stake to almost 36% by early September, giving it power to set the agenda at VW general assemblies.