VW Ordered to Sell $3.8 Billion Suzuki Stake as Tie-Up Ends

31 Aug 2015 | Author: | No comments yet »

Suzuki Motor Corporation: Notification Concerning Arbitration Award.

BERLIN (AP) — Volkswagen AG and Suzuki Motor Corp. say an arbitration tribunal has formally put an end to a failed alliance between the two companies to develop green cars, and Suzuki will buy back the 19.9 percent stake that Volkswagen held. VW will sell its 19.9 percent holding after the arbitrators upheld the Japanese automaker’s request to end the cooperation, the companies said in separate statements on Sunday. If there are any discrepancies between this document and the original Japanese document, the original Japanese document prevails.) As Suzuki Motor Corporation (“Suzuki”) received an award on 29 August 2015 regarding the arbitration that Suzuki filed with the International Court of Arbitration of the International Chamber of Commerce on 24 November 2011, Suzuki informs you as follows: The Framework Agreement between Volkswagen AG (“VW”) and Suzuki was validly terminated by Suzuki’s notice of termination dated 18 November 2011, such termination being effective from 18 May 2012.

Volkswagen AG must dispose of its 19.89% shareholding in Suzuki forthwith to Suzuki or its designee, by a method to be reasonably determined by Suzuki. The end of the dispute provides Suzuki with the opportunity to find a new partner, after its cooperation with VW failed to result in a single joint project. In 2009, Suzuki and Volkswagen entered a partnership, with the German auto maker buying a 19.9% stake in Suzuki for about 1.7 billion euros in 2010 ($1.9 billion in today’s rates). It’s small compared to VW and other global competitors. “It’s like taking out a tiny bone stuck in my throat,” Chairman Osamu Suzuki, who brokered the deal in 2009, said at a press conference Sunday in Tokyo. “I feel refreshed.” The goal of the partnership was to cooperate on small, fuel-efficient cars for emerging economies, providing Suzuki with access to technology while giving VW a wider role in the Indian market through Suzuki’s business there. As trust broke down, the companies accused each other of breaching the accord. “After their irreconcilable quarreling, the separation was unavoidable,” said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen “Mr.

Suzuki said that VW has to sell the stake back to them or a party of the Japanese company’s choosing, while VW said the buyer of the stake hasn’t been decided yet. At this stage, Suzuki does not foresee any need to amend its forecast of consolidated results for the fiscal year ending March 31, 2016, however, if any matters that need to be disclosed occur, such matter will be promptly disclosed.

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