DaimlerChrysler plans to sell a 10.5% stake in Hyundai Motor worth nearly $US1 billion via a block sale, an official at South Korea’s top carmaker told Reuters.
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The official denied a report that Hyundai would buy back the stake from the Stuttgart-based group, but added: “As far as we know, the German carmaker is seeking to sell the stake via a block sale to other buyers.”
According to the news agency, German newspaper Handelsblatt cited industry sources on Monday as saying DaimlerChrysler would sell to Hyundai.
Sources on DaimlerChrysler’s supervisory board told Reuters that it would drop plans to form a commercial vehicles joint venture with the South Korean company and confirmed that Stuttgart wanted to sell its 10.5% holding.
“There’s no sense anymore,” a source on the board said, referring to the joint venture.
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By GlobalDataReuters noted that CFO Manfred Gentz said on Thursday the future of the investment was open.
“We’re still negotiating,” a DaimlerChrysler spokesman told Reuters on Monday.
The report said a sale would be DaimlerChrysler’s second major reversal in Asian strategy in as many months after the group cut off financial support to its ailing Japanese partner, Mitsubishi Motors in April, dividing the management board and prompting CEO Juergen Schrempp to offer to resign, though he survived after he won a statement of support from the supervisory board at a meeting in New York on Thursday.
Hyundai had said last week it was planning to scale back its partnership with the Stuttgart-based group to work on a project-by-project basis rather than in a full alliance, Reuters noted.
The news agency added that the two companies have been in talks to produce commercial vehicles and engines in China, but the relationship soured.
Hyundai suspended the talks, aimed at forming a joint venture, after Daimler signed a deal with Beijing Automotive Industry Holding Co., which Hyundai said violated its own agreement with the Chinese carmaker.
Reuters said DaimlerChrysler formally signed an agreement with BAIC during a German visit by Chinese premier Wen Jiabao on Monday – the deal will allow it to build as many as 25,000 C and E-class Mercedes cars annually at a new works in Beijing.
The group said in a statement that production would start in the near future but was not more specific about the timetable.
Reuters said the Hyundai stake is worth more than $940 million and has doubled in value since DaimlerChrysler bought it in September 2000.
The news agency also noted that Sunday’s edition of the Frankfurter Allgemeine newspaper reported that some members of the supervisory board were still discussing possible replacements for Schrempp and that the chief executive could be replaced within two years.
