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Mazda to Buy Back 10% of Shares from Ford

Posted on 23. Oct, 2008 by DeuxEx3 in Mazda News, What's Hot

It looks like we might finally be seeing Ford’s unofficial Mazda fire sale come to an end as the Ashai newspaper in Japan reported Mazda will be purchasing ten percent of Ford’s 33.4% ownership in the company back. Rumors and speculation have been circling the troubled U.S.-based automaker since late September claiming Ford was secretly shopping their stake in Mazda around to see who would be interested.

The rumors gained traction once Ford’s Motor Credit Co. announced they would no longer finance new vehicle sales for Mazda and Chase Auto Group stepped in as the financial savior. After the rumors started gaining credibility Mazda made a statement declaring no decision had been made regarding Ford’s stake in the company.

Shortly thereafter, Tata stated that it was uninterested in pursuing an acquisition of Ford’s stake in Mazda which is estimated to be worth more than $1.3 billion dollars (USD). Earlier this year Tata purchased the Land Rover and Jaguar brands from Ford’s Premier Auto Group for £1.15 Billion. As the rumors continued to cirulate, news broke that Ford had now decided to sell only 20% of its 33.4% stake in Mazda and wanted to sell that batch of shares to various different companies, mostly Japanese corporations, to prevent competing automakers from picking up a huge chunk of the profitable manufacturer.

In addition to Mazda’s purchase of its own shares the following companies have also been suggested as the purchasers of the remaining 10%: Tokio Marine Holdings, Mitsui Sumitomo Insurance Group Holdings, Sumitomo Corp and Denso Corp.

Both Mazda and Ford have yet to make an official announcement on the latest news about the sale but it is widely expected that any sale, whether it be Ford’s full stake or partial stake in the company, will not affect Mazda’s product lineup or business/product ties to Ford.

[Source: Reuters]