Ford to Reduce Stake in Mazda

VOA Breaking News (Voice of America)
November 18, 2010 at 12:20 pm

Japanese automaker Mazda says U.S.-based Ford Motor Company is selling most of its stake in the company and giving up its claim as Mazda’s top shareholder.

Thursday’s announcement that Ford is reducing its shares from 11 percent to 3.5 percent confirms a report published the day before by The Nikkei, Japan’s leading business daily. The transaction is valued at $372 million.

The announcement said Ford will transfer the shares to several of Mazda’s business partners, but did not identify the companies. The Nikkei reported Wednesday the shares will be split among 10 Japanese companies.

Speculation has been growing in recent weeks that Ford was seeking to reduce its stake in Mazda to gain more flexibility in its Chinese operations.

Mazda says the two companies will continue their “strategic partnership,” which includes a number of jointly owned factories.

Ford began its involvement in Mazda in 1979, when it bought a 25 percent stake in the financially struggling Japanese automaker. Ford increased its stake to 33.4 percent in 1996, giving it controlling interest.

The U.S. automaker dramatically reduced its shares in 2008 to just 13 percent to raise badly-needed cash. Ford gave up another two percent last year after Mazda issued new shares.

Some information in this story was provided by AP, AFP, Bloomberg and Reuters.