Déjà Vu: GM Really Wants a Slice of Isuzu Motors
Editor/Reporter - CheersandGears.com
May 3rd, 2012
At one point in the past, General Motors held a 49 percent stake in the Japanese automaker Isuzu. Over the years however, as GM’s market share eroded and the Detroit car company began fighting against the tides of red ink, it began selling off its shares in Isuzu until the alliance came quietly to an end. In 2006, it sold off its last 7.9 percent stake in the company for a reported $300 million dollars in order to fund restructuring efforts that were badly needed at the time.
History is about to repeat itself then, as General Motors is reportedly in talks with Isuzu Motors to form a new alliance. This past Sunday, Japanese newspaper Nikkei reported that GM could buy a 10 percent stake in Isuzu. The two automakers would collaborate on developing pickup trucks and selling vehicles in Central and South America, as well as Asia. Isuzu could also benefit from access to GM’s hybrid know-how and other fuel saving technologies.
Since emerging from bankruptcy in 2009, GM has been focused on striking up new partnerships. Most notably, GM recently bought a 7 percent stake in Peugeot-Citroen SA back in March that cost $423 million dollars.
While General Motors may be set to take 10 percent of Isuzu, it’s also rumored that GM initially wanted to buy 33.4 percent of the automaker — which amounts to roughly one-third — at a cost of $3 billion dollars. If GM didn’t scale down how much of Isuzu it wanted to buy, it would give GM the right to veto any decision made by board members.
Source: Reuters 4/29/12, Reuters 5/2/12
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