Porsche’s family owners on Thursday ended months of feuding over a rescue of Germany’s debt-ridden sports carmarker by agreeing a merger with Volkswagen and ousting its chief executive Wendelin Wiedeking with a huge €50m pay-off.

The merger, which is planned for 2011, would bring Porsche under the umbrella of Europe’s biggest car and truck empire, where it would join other famous marques including Audi, Bugatti and Bentley.