| DaimlerChrysler exits Mitsubishi, sells balance stake to Goldman Sachs |
|
|
DETROIT: DaimlerChrysler AG has sold its remaining 12.42 per cent holding in Japanese carmaker Mitsubishi Motors Corporation to investment bank Goldman Sachs.
Stuttgart-based DaimlerChrysler, the world's fifth-biggest carmaker, said it is exiting the MMC investment but did not disclose the sale price. It, however, said the sale could boost its 2005 financial income by about 500 million euros.
The investment in the Japanese company was once seen as a the U.S.-German carmaker's strategy for a global presence. It had paid 2.4 billion euros for 37 per cent holding in the company five years ago. The investment did not give any returns and the company had in fact to absorb 665 million euros in losses last year.
Goldman Sachs may place the shares it had bought with institutional investors around the world.
DaimlerChrysler has some close operational tie-ups with the Japanese partner like joint development of engines and vehicle platform sharing. The partners said existing projects will not be affected by the divestment and the companies would extend mutually beneficial projects.
DaimlerChrysler had sold last year its stake in Korea's Hyundai Motor Co Ltd and is now divesting holding in heavy diesel motor unit MTU Friedrichshafen.
The investment in Mitsubishi Motors had been the grand idea of the company's CEO Jurgen Schrempp, who had persuaded the company's board to acquire one-third of the Japanese carmaker. Mitsubishi Motors incidentally is the only Japanese car company making losses. Schrempp will be exiting at the end of the year handing over the reins to Dieter Zetsche.
Mitsubishi was also involved in a scandal over hidden defects on its vehicles, a serious issue in quality-focused Japan. DaimlerChrysler ultimately got a $200 million discount on its stake, paying $1.9 billion for a share that eventually reached 37 per cent.
DaimlerChrysler is now in the process of restructuring costing some $1.1 billion. It involves 8,500 job cuts at Mercedes, and analysts point out that the proceeds from the stake sale become handy for the company.
Posted
on : Sun, 13 Nov 2005 10:25 GMT | Business News
By : Salim Patel
|
| |
| Related |
|
|
|
