Volkswagen unlikely to obtain a full takeover of Suzuki

Article by Christian A., on September 21, 2011

Suzuki Motor is seeking to terminate a two-year partnership with Volkswagen, making it highly improbable that there will be a full takeover. A source from the senior ranks told German magazine Der Spiegel that a full takeover of Suzuki can’t be ruled out.

Commerzbank analyst Daniel Schwarz said that Suzuki chairman and CEO Osamu Suzuki won’t want to sell and so it won’t be a simple thing for VW to take over the unwilling company.

Last week, Suzuki said that it sought to end its two-year alliance with VW, which accused the Japanese automaker of being in violation of the pact when it entered a diesel engine supply deal with Fiat, says Reuters.

CEO Suzuki made an offer to purchase Volkswagen's 19.9% stake in his company with cash on hand, but VW replied that it doesn’t plan on selling. Der Spiegel said that as soon as the alliance formally ends, VW won’t need Suzuki’s approval to increase its stake in Suzuki.

However, analysts are skeptical. Macquarie Research analyst Christian Breitsprecher said that it’s not likely that VW will pursue a “hostile takeover of Suzuki.”

The partnership was forged in 2009 since Suzuki wanted access to hybrid and diesel technology that it can’t afford to develop by itself and VW wanted to boost its presence in the small car segment in India.

Topics: vw, suzuki, partnership

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