Daimler is to receive EUR265m (US$359m) following the sale of its 5.34% stake in Tata Motors to investors.
The company said the sale was generated by Daimler’s success in India, which meant its equity participation in Tata was no longer necessary.
Tata Motors’ share price has risen significantly, especially last year, said Daimler, which will receive a “substantial cash inflow” of approximately EUR300m from the sale of its shares. The transaction will have a positive effect on Daimler’s EBIT of approximately EUR265m and will be accounted for in the first quarter of 2010.
Daimler said in a statement: “This has been done in full consultation with Tata. Relations between the two companies are excellent and will not be adversely affected by this sale.
“In the first two months, Mercedes-Benz almost doubled its sales to 800 vehicles. Additional positive impetus is expected this year from the launch of the new E-class. In 2010, Mercedes-Benz intends to gain market share and to grow at a double-digit rate. Over 3,200 cars were delivered in India last year.”
Daimler also sees India as lucrative for its truck division with the takeover by Daimler India commercial vehicles (DICV) of the marketing of Fuso-branded commercial vehicles at the beginning of 2010. The first Fuso was sold in January.
DICV is building a new plant in Chennai, South East India and, starting in 2012, the new plant will initially produce light, medium and heavy-duty commercial vehicles under a new brand name. Production of trucks for export to other emerging markets will follow later.
Daimler also established its largest research and development centre outside Germany in Bangalore in 1996.