Croatian electric car maker Rimac Automobili will take a controlling stake in Bugatti in an ownership swap arrangement with the French race car brand's owner Volkswagen, the companies said on Monday.
Under the deal, Rimac and Volkswagen will set up a joint venture focused on Bugatti.
Rimac will hold 55 per cent of shares in the new company, while Volkswagen will then delegate its stake of 45 per cent to Porsche, its luxury sports car unit.
The new company will be based in Zagreb and known as Bugatti-Rimac.
It will be founded in the fourth quarter of 2021, subject to approval from competition authorities, the companies said.
Financial details of the deal were not disclosed.
Porsche itself holds a minority stake in Rimac. It bought shares in the Croatian company in 2018 and has gradually increased its stake to its current level of 24 per cent.
Mate Rimac, founder and chief executive of Rimac, said the project was "a really exciting moment" that "takes the company to a whole new level".
The venture will combine "Bugatti's strong expertise in the luxury car business with Rimac's great innovative strength in the promising field of electric mobility", Porsche chief executive Oliver Blume said.
Mate Rimac will be the chief executive of the new company, which will employ about 300 staff in Zagreb and 130 at Bugatti's existing site in Molsheim, France.
It will initially produce two luxury car models – the Bugatti Chiron and the all-electric Rimac Nevera – with more models planned for the future.
The European Union is to unveil tougher 2030 CO2 emissions targets and regulatory proposals on July 14, which are expected to require car makers to speed up the transition to electric vehicles.
Volkswagen said last month it plans to stop producing cars with internal combustion engines in Europe for its eponymous flagship brand between 2033 and 2035.
The German car company's electric push has also been accelerated by its "dieselgate" scandal, which rocked the industry and cost Volkswagen both in cash and reputational terms.
