First GM sells their stake in Suzuki, and now Ford has announced that they plan to sell two-thirds of their stake in Mazda. As with the GM sale, Ford is scrambling to find cash.
Ford, currently owns 33.4% of Mazda, which is a controlling interest. This sale is about a 20% stake. This would net Ford $540 million based on Mazda's closing price today, which is barely a quarter of what a 20% stake in the Japanese automaker was worth one year ago. Mazda's shares rose 6.4% to 184 yen today amid media reports of a coming sale.
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I applaud both this move and GM's move with Suzuki. It's a win-win for both sides. I was just having a conversation about this sort of thing with my father this weekend. By a company like GM controlling (some) of the interests in a company like Suzuki, it allows the owning company to pillage and plunder from the smaller company while stifling their growth.
By selling their stakes, it'll give the smaller company room to expand, while giving the previous owner cash to try to save itself.
Smart move.
Too bad this arrangement will get watered down a bit; both Ford and Mazda appear to have benefited from Ford's controlling interest in the company. Hopefully the platform sharing will continue as the article notes.
Agree with that steve_.
It seems that the relationship between Mazda and Ford has been the most beneficial for both companies.
Unfortunately, that's not the case with most other business partnerships like this (ie. Isuzu/GM).
Ford has no choice, so I do think this was a good move.
Think about this - we never got the euro Focus but rather the Mazda3 instead.
Why should Ford play 2nd fiddle to a company it controls?
This has hurt Ford. They even admitted that keeping the old Focus didn't save them any money. That's just tragic.
Now sell Volvo.
"Now sell Volvo."
Volvo begat the platforms for Taurus and Flex.
As a matter of fact, the only unibody Ford I can think of whose platform originated in Detroit is Mustang.
"It seems that the relationship between Mazda and Ford has been the most beneficial for both companies."
I can see what Ford gets from Mazda but can't think of anything good Mazda gets from Ford.
How does selling 3% of Suzuki ($19.7B in revenue) equate to $230M whereas 20% of Mazda ($36B) nets $540M? Obviously revenue isn't the best indicator of a company's value, but Mazda is certain way larger than Suzuki, not the other way around.
By this logic, Suzuki is worth $7.6B while Mazda is worth $2.7B.
I think someone in the AP forgot to carry the 1 or misplaced a decimal.
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Anyway, this is a smart move. I hope Ford continues to sell the remainder of Mazda in the future.
estreka, I remember posting similar thoughts when talk of selling Mazda first came up. Mazda seemed way under valued.
I like Mazda, but I think Ford has better mainstream products. It's still sad.
Firstwagon,
I was thinking more in terms of the fact that Ford has allowed Mazda free reign to design and develop their products on their own. Yes, Ford does pillage them still. But comparably to companies like Mitsubishi, Suzuki, and Isuzu, Mazda seems MUCH better off in their relationship with Ford than any of those other brands in their relationship with their partners.