The German government approves an amended law that retains some rights held by the state of Lower Saxony to control decision-making at the nation’s largest car maker, Volkswagen AG.

Porsche AG, which controls 31% of VW and has signaled plans to increase its stake beyond 50%, opposes the pending law, which gives Lower Saxony veto rights over decisions made at shareholder meetings.

Employee representatives on the auto maker’s supervisory board also would have a say over any decisions to move production.

German Chancellor Angela Merkel’s cabinet is expected to decide on whether to approve the law May 27.

Analysts say the new law, which revises a previous statute struck down last year that capped VW shareholder voting rates at 20%, may sway Porsche against increasing its stake beyond 50%. Speculation was Porsche would buy as much as 75% of VW.