VW Said To Be Close to Announcing Plans to Acquire 20 Percent Stake in Suzuki
By Scott Doggett December 8, 2009
Volkswagen AG is close to announcing plans to take a stake of up to 20 percent in Japan's Suzuki Motor Corp, Reuters news service reported today, three sources with direct knowledge of the negotiations.
One of the sources, who asked not to be identified because the information is not public, said Volkswagen's stake could "easily" rise to a controlling stake of more than one-third down the line.
"An announcement could come as early as this week," the source said today. "This is the first step."
A 20 percent stake in Suzuki would be worth about $2.8 billion.
Spokesmen at Volkswagen and Suzuki had no comment.
As we reported Monday, Volkswagen is primarily interested in Suzuki's expertise in developing and manufacturing inexpensive, fuel-efficient small cars.
VW has been struggling to manufacture profitable low-cost small vehicles. Suzuki, by contrast, has long had an impressive record of making small cars profitably.
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