(BRUSSELS) - The EU's competition watchdog said Friday that it will rule by June 18 whether to authorise German luxury carmaker Porsche's bid to take a majority stake in its compatriot Volkswagen.

Between now and then, the European Commission may give the green light, impose conditions or announce a more in-depth investigation into the competition implications of the proposed deal.

Porsche, which currently owns 31 percent of VW shares, plans to raise its stake to more than 50 percent at an unspecified date, bringing both car companies under the umbrella of one holding company.

It officially notified the commission of its plans on Wednesday.

Separately, Volkswagen is in dispute with the European Commission over a law protecting the carmaker from hostile takeover bids.

The so-called VW law was introduced in 1960 as Volkswagen, founded by the Nazi regime before World War II, was being privatised, and was designed to shield the group from foreign takeover attempts.

The crux of the law is that regardless of the amount of capital it owns, a shareholder cannot hold more than 20 percent of the voting rights in the company.

Last year, Europe's top court ruled against the VW law. Porsche also is seeking to change the statutes so that it will have a freer hand with VW.

Brussels deems changes to the law proposed by the German authorities to be insufficient to bring it into line with European Union law.

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