GM Sells Leftover Suzuki Stake to Raise Cash
While awaiting a decision on a $25 billion U.S. government aid for the auto industry, cash-strapped General Motors decided to sell back its 3.0 percent stake in Suzuki Motor Cooperation for 22.37 billion yen or $230 million. Suzuki issued an official statement this morning saying that the purchasing price will be today's closing price of 1,363 Yen per share for GM's 16,413,000 Suzuki shares which is equal to 3 percent of the Japanese firm's total issued common stock, on the open market. GM's partnership with Suzuki began in 1981 but the American company loosened its bonds with the Japanese automaker in March 2006 when it sold a 17 percent stake.
Suzuki said that the two automakers will continue doing business together despite the break up. "We are committed to continue promoting and implementing not only our existing projects, including development collaboration on advanced automotive technologies, but also collaboration on entries in new emerging markets," Suzuki said in a release. The two companies also confirmed "to give positive consideration on a possibility for GM to repurchase Suzuki shares in the future".
Statement by Osamu Suzuki
"Suzuki and GM have been constantly exchanging frank opinions on various topics as business partners. As GM taking this particular step to sell the shares it owns as a step toward strengthening its balance sheet is very understandable, we wanted to support GM's decision. We confirmed each other in a conference call with Wagoner-san and me that all individual initiatives will be pursued as they are today. There will be no impact on Suzuki's current business plan."
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