WOLFSBURG, Germany (


) --


said Wednesday it has signed an agreement to purchase 19.9% of Japan's

Suzuki Motor

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for $2.5 billion.

The closing of the transaction is subject to approval of the relevant authorities and is expected in January.

Suzuki said it intends to invest up to one-half of the amount received from Volkswagen into shares of the German automaker.

Volkswagen, in a statement Wednesday, said the companies plan to meet the growing demand for more environmentally friendly vehicles.

"The management of Volkswagen and Suzuki have concluded that the complementary strengths of each company make for a perfect fit in exploiting their respective advantages as well as rising to the challenge of the global market," Volkswagen said.

The deal also could boost the companies' presence in expanding markets. Suzuki has a large market share in India, while Volkswagen is strong in China.

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