Detroit, Michigan - General Motors has officially announced that it will reduce its equity stake in the Suzuki Motor Corporation from 20.4 per cent to 3.0 per cent, by selling 92.36 million shares. The strategic alliance between the two companies will continue.
GM plans to sell the shares, representing 17.4 per cent of the shares outstanding, through the Suzuki open-market buyback program and through market sales if necessary. GM currently holds a total of 108.66 million Suzuki shares, which had a closing price of 2500 Yen per share on March 3rd at the Tokyo Stock Exchange. Based on this market value, GM expects to realize cash proceeds of approximately US$2 billion from the sale.
"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."
GM has held an equity stake in Suzuki since 1981, when it purchased approximately 5.3 per cent of Suzuki shares outstanding; its stake was diluted to 3.5 per cent in subsequent years, but increased to 10 per cent in 1998, and to slightly over 20 per cent in 2001. The companies have been involved in various joint projects in product development, advanced technology, global purchasing and supply chain management, and in Canada, the manufacture of a new medium-size SUV at the company's joint CAMI Automotive Inc. in Ontario. GM says the cross-supply of OEM vehicles will continue, and the two companies plan to work together on a proposed new automatic transmission program.