GM Sells Much of its Equity in Suzuki
Yesterday, General Motors announced that it would be selling off its shares in Suzuki Motor Corp., reducing its equity in the Japanese automaker from 20.4 percent to just 3.0 percent. In monetary terms, the 17.3 percent difference equates to some 92.36 million shares, each valued at 2,500 Yen, worth an estimated $550 to $750 million US dollars after applicable taxes and credits.
The GM-Suzuki partnership started twenty-five years ago in 1981 when GM purchased a 5.5 percent stake in the Japanese small car manufacturer, but that number dwindled to 3.5 per cent by 1985. During the first few years, the two worked to build the efficient and economical Swift/Sprint/Firefly, and shortly thereafter, variants of Suzuki’s Sidekick compact SUV.
By 1998, GM and Suzuki were well into their relationship; they owned a significant portion of the economy car market through successful subcompact cars and SUVs, not to mention the construction of the CAMI joint-venture manufacturing facility, located in Ingersoll, Ontario, Canada. That year, General Motors bumped its shares in the brand up to 10 percent, and in 2001, added another 10 percent. These additions came as little surprise; General Motors used Suzuki’s products to bolster its presence in Asia.
“GM has a great deal of respect and admiration for Suzuki based on our long and productive history of working together,” said Rick Wagoner, GM chairman and CEO. “Our relationship is strong, and we look forward to our continued partnership. This transaction will allow us to preserve our business relationship, while further building up GM’s already significant liquidity position during this critical phase of our turnaround.”
Pages: 1 2