A 1.5 percent stake in Volkswagen owned by Suzuki is being taken up by Porsche Automobile Holdings SE, the German auto maker's biggest shareholder. This was announced today by Suzuki and Porsche without disclosing the price. Suzuki, which holds the stake in Volkswagen as a part of a failed partnership with the German auto maker, will transfer the shares to Porsche on Wednesday, the Japanese auto maker said in a statement.
As a result of the sales, Suzuki will post Yen36.7 billion (US$304 million) in special profit, it said.Porsche Automobil Holdings manages assets held by the Porsche and Piech families--descendants of Ferdinand Porsche, the inventor of the Volkswagen Beetle--and controls more than 50% of Volkswagen's voting stock. In late 2009, the two companies struck a deal to cooperate in emerging markets, and work together on the development of fuel-efficient small cars. As a part of the deal, Volkswagen purchased a 19.9% stake in Suzuki, while Suzuki acquired a 1.5% stake in Volkswagen but the deal has gone sour.
Last week, Suzuki repurchased its own shares from Volkswagen for about Yen429 billion, following an order in August by The London Court of International Arbitration. The court also said that Suzuki had breached the alliance agreement, and Suzuki has said it may have to pay damages to Volkswagen.
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