Beyond existing business ties, Volkswagen and Porsche share a historical bond that goes back for decades.
Volkswagen's first boss was Porsche founder Ferdinand Porsche. His grandson, Ferdinand Piech, who managed Volkswagen, is now the group's chairman -- and his extended family still control sports car maker Porsche.
1931 - Ferdinand Porsche opens a design office, sowing the seeds for a business that will later become the eponymous sports car maker.
1938 - Porsche, who designed the first VW Beetle, oversees the building of the first production hall for Volkswagen.
1960 - The state-owned carmaker is privatised, with both the federal government and the company's home state of Lower Saxony receiving a 20 percent share of Volkswagen.
1993 - Porsche grandson Ferdinand Piech becomes chief executive of Volkswagen, which means "the people's car" in German. His revolutionary platform strategy helps dramatically boost economies of scale and save the company from a possible collapse but avoids slashing thousands of excess jobs.
2002 - Piech appoints Bernd Pischetsrieder as his successor as CEO and Piech becomes chairman.
September 2005 - Porsche announces that it will take a 20 percent stake in Volkswagen, matching the shareholding of Lower Saxony, VW's largest investor. The sports car maker says the plan originated with CEO Wendelin Wiedeking, not Ferdinand Piech as most suspected.
October 2005 - State premier Christian Wulff criticises what he says is Piech's conflict of interest because he is both Volkswagen chairman and controller of Porsche.
November 2006 - Following a boardroom coup incited by Piech, Pischetsrieder tenders his resignation effective at the end of the year to be replaced by Piech's chief ally, Audi boss Martin Winterkorn.
November 2006 - Porsche announces that it has increased its holding of VW voting shares to more than 27 percent and that it wants to increase it further to 29.9 percent.
February 2007 - EU court adviser recommends striking down Germany's "VW Law" that caps individual shareholders' voting rights in the company at 20 percent.
February 2007 - State premier Wulff drops opposition to Piech as VW chairman.
March 2007 - Porsche announces it is boosting its voting stake in VW to 30.9 percent, triggering a mandatory takeover offer to other VW shareholders.
April 2007 - Porsche launches lowball bid that values VW voting rights at just below 101 euros per ordinary share and insists it is not aiming to acquire a majority of the carmaker through the mandatory offer.
June 2007 - Porsche says only around 0.06 percent of VW's capital is tendered, leaving it with a stake of just under 31 percent.
September 2007 - Porsche CEO Wendelin Wiedeking says company has acquired enough options to "significantly" raise its holding in Volkswagen but declines to comment whether it could gain majority control.
October 2007 - European Court of Justice strikes down VW Law, saying it illegally restricts the free flow of capital; Porsche says its supervisory board will have to decide how to procced.