U.K.-based Ford Motor Co. is planning to cut down its 11 percent stake in Japan-based Mazda Motor Co. to 3 percent as it struggles to weather the fluctuating conditions of the automobile industry.
The plans represent a continuation of the company's policy to reduce its stake in Mazda to a minimal as it has already sold 67 percent of its stake in the company since 2008. Ford is looking to raise cash to improve its overall financial outlooks as dropping auto sales have strained the company finances.
Ford is under negotiations with a group of Japanese investors led by Sumitomo Mitsui Bank, which is the main creditor of Mazda. Sumitomo Mitsui chairman Masayuki Oku said the bank will become Mazda’s largest shareholder by the end of this year. Mazda, however, refused to comment on the changes in its fiscal partnership with Ford.
The companies entered a partnership in 1979 as Ford developed a reliance on Mazda to develop small, fuel-efficient cars with the latter utilizing Ford’s larger sales volume to fund research projects. The companies also run joint operations of factories in the US and Thailand.
Ford last sold Mazda shares in November 2008, but pledged a continued alliance with the company despite the reduced financial partnership between the two.
Mazda has expanded its partnerships in recent years as it entered a deal with Toyota in March to license elements of the latter’s petrol-electric hybrid drive system, passing on a similar technology developed by Ford. There is only one Ford manager sitting on Mazda's board after the company recalled two senior mangers in 2008; he is likely to leave after the divestment is complete.
