Shares in Volkswagen AG soared higher on Thursday after Europe's biggest automaker announced a deal to complete the takeover of sports car manufacturer Porsche by the end of the month, which the company said will result in savings of some US$880 million per year.

The company announced Wednesday night that Porsche will become a fully integrated brand of the Wolfsburg-based company as of August 1.

Volkswagen is to buy the 50.1 percent in Porsche's capital that it doesn't already hold from holding company Porsche SE for US$5.6 billion plus one Volkswagen share.

The German automaker said that integrating Porsche's highly profitable car business would have a positive impact on its earnings.

The Volkswagen group already includes brands such as Audi, Volkswagen, Seat, Bugatti and Bentley.