Troubled US carmaker Ford Motor is selling a 20% stake in Japan's carmaker Mazda Motor. The announcement follows General Motors decision to sell its 3% stake in carmaker Suzuki for 230 million US dollars to raise cash.
Ford owns a 33.4% stake in Mazda. The move will reduce it to just over 13%. Ford has been hit hard by falling sales around the world and is seeking to raise cash along with its Detroit competitors GM and Chrysler. Shares in Mazda jumped 6.4% on Tuesday on reports about the possibility of the stake sale. The possible sale of a 20% stake in Mazda was first reported more than a month ago. At that moment, the stake was valued at 850 million. However, based on Mazda's share price on Tuesday, the value of the holding has fallen to 543 million. Meanwhile Suzuki said it would buy back the stake, adding that it understood GM faced a need to secure funding. GM has reported a net loss of 2.5 billion USD in the third quarter and has been trying to secure an emergency government loan along with its Detroit competitors. Ford first bought a stake in Mazda in 1979. It took control of the Japanese carmaker in 1996, saving it from potential bankruptcy. According to media reports, Ford's stake in Mazda may be bought by trading houses Sumitomo and Itochu, Japanese insurance companies, car parts maker Denso, as well as by Mazda itself. Suzuki, which specialises in small cars and has a GM partnership dating back to 1981, said the two companies would continue to cooperate in a number of joint projects including developing new technologies. The US carmaker had already sold a 17% stake in Suzuki, in 2006. The "Big Three" US car firms Chrysler, Ford and GM are seeking a total 25 billion USD in emergency US government loans.