Suzuki May Finally Climb Out From Under VW
Hedge fund investor Daniel Loeb has purchased a minority stake in Suzuki Motor Corp., which may mean the automaker could have a ruling on its nearly 5-year arbitration with Volkswagen, Bloomberg Business is reporting.
The unspecified investment in Suzuki by the billionaire Loeb, who is one of Japan’s wealthy business elite, could be a sign that a ruling following June’s completion of arbitration is imminent. For years, Suzuki remained “paralyzed” as the procedure slogged on.
Suzuki has a significant automotive presence in emerging markets and India.
Shares of Suzuki jumped in Tokyo trading on the news.
In 2009, when the alliance between Volkswagen and Suzuki was announced, both automakers stood to gain from each other — on paper. Volkswagen would benefit from Suzuki’s growth in emerging markets, including its relationship and distribution in India with Maruti Suzuki. The Japanese automaker could benefit from VW’s vast resources and technology. The relationship soured quickly after.
The remaining issue between VW and Suzuki could be the nearly 20-percent ownership stake the German automaker has in the Japanese automaker. According to Bloomberg, Suzuki may have enough cash on hand to buy back the remaining shares if a London-based arbitration court allows it, according to the Wall Street Journal.
Either way, we could be seeing a lot more of Suzuki — which is still Japan’s fourth-largest automaker, by the way — real soon.
If they bring that Wagon R here I will be the weirdo who buys one. It will have Negative Population Growth and NRA and Smith & Wesson stickers on the bumper, be a fixture in all the right lanes and serve as a sign to my local community that, yes, Perkins is open and serving customers.
Loeb is not really part of "Japan's wealthy business elite" -- he's very much American, and based in NYC. His fund has, however, made some activist investments in companies such as Sony and Fanuc. Osamu might not end up being so happy being pushed around by an American investor, either. Automotive News had a great story yesterday on how the alliance went awry, having had access to a lot of insider information: http://europe.autonews.com/article/20150803/COPY/308079999/how-the-vw-suzuki-alliance-went-wrong Suzuki was expecting a lot of detailed technical data (including hybrid technology) and was disappointed that it would need to invest manpower to make the alliance work. VW wasn't happy with Suzuki's spot-welding manufacturing (VW prefers laser welding) but then upset the Suzuki brass with what seemed like an innocuous classification of its investment in Suzuki. Go read it. It's worth 15 minutes out of your day.
This article is so fundamentally wrong/incorrect, it should be withdrawn or rewritten. It's gobbledegook as it stands. Here's the real story from Reuters: http://mobile.reuters.com/article/idUSL3N10E1Y420150803?irpc=932 Suzuki can look forward to Loeb's company Third Point trying to grab seats on the board with perhaps 5% of the shares, and generally making the company's life living hell. Then, they'll force it to hand out a huge one time dividend, flog their shares at the consequent high share price, and then look for another company to bleed. They've done it to several companies, and tried it at Sony, who politely told them to eff off. If Suzuki Jr is anything like his own man, the same thing will happen here. Most companies cave to this parasite, however. All on the web. Loeb of course thinks he's wonderful: http://www.businessinsider.com/third-point-founder-dan-loeb-defends-activism-2015-8
'Loeb, who is one of Japan’s wealthy business elite" O RLY. He lives in the Hamptons, his company is based in NY as well. I guess the barriers for entry to "Japan’s wealthy business elite" are pretty low?