DaimlerChrysler AG on Friday said it would sell its remaining stake in Mitsubishi Motors, a move that will help close the book on Juergen Schrempp's reign as head of the German-American automaker.
DaimlerChrysler (DCX) said it's selling its remaining 12.4% stake in Mitsubishi Motors , resulting in a capital gain of around 500 million euros. Mitsubishi separately disclosed that the buyer of the stake is Goldman Sachs Group (GS).
DaimlerChrysler said the deal will be done by the end of November at the latest. Shares of the automaker rose 1.9% in a rising Frankfurt market.
The automaker added it'll continue to cooperate with Mitsubishi Motors on all projects and components.
Dresdner Kleinwort Wasserstein analyst Jens Schattner said the deal will allow DaimlerChrysler to help fund the restructuring of its Smart car division as well as fund the cutting of 8,500 jobs in Germany.
"Today's announcement ... should be seen as a clear sign that Mercedes Car Group will increasingly focus on its core activities," Schattner said.
Schrempp, to be succeeded as DaimlerChrysler's chief executive by Dieter Zetsche at year's end, engineered in 2000 the company's acquisition of a third of the Japanese automaker for nearly $2 billion.
That stake rose to as high as 37%, but the investment didn't turn out to be a fruitful one, and in April 2004 the automaker stunned investors by opting not to participate in a capital-raising offering by Mitsubishi Motors, despite Schrempp's advice to the contrary.
DaimlerChrysler and other partners had been negotiating a $7.6 billion investment into Mitsubishi.
The company's board backed Schrempp in the aftermath of not funding Mitsubishi, but his standing at the automaker never recovered.
Last July, Schrempp said he would step aside, sending DaimlerChrysler shares soaring.
The stake-sale news comes as Mitsubishi Motors reported that its operating loss for the first half ended Sept. 30 narrowed to 19.8 billion yen ($167 million), while sales fell more than 7% to $8.4 billion.
It sold 2% more vehicles, a total 659,000, during the period, though North American sales came in below earlier company forecasts.
Mitsubishi Motors shares ended 2.6% lower in Tokyo trade.
(END) Dow Jones Newswires |
