The finalisation of the deal came a month after Abu Dhabi signed a memorandum of understanding (MoU) to acquire a 10 per cent stake in the German car maker. Proceeds from the stakeholding, for which formal negotiations are expected to get under way in Berlin in early July, will be used by VW to finance its Leaseplan acquisition. The change in ownership structure is also expected to cushion the company from EU anti-monopoly legislation, which threatens to overturn a German law that gives VW's home state of Lower Saxony effective control of the company.

Abu Dhabi and Germany have enjoyed increasingly strong political and trade relations recently. A high-level delegation of officials from the emirate attended an international conference in Berlin on 31 May and Germany's Chancellor Gerhard Schroeder visited Abu Dhabi in late April. Both delegations were aimed at strengthening the strategic partnership between the emirate and VW, which is understood to be drawing up plans to set up an assembly unit in Abu Dhabi's special economic zone.