Over the weekend reports emerged claiming Ford was considering selling a majority of its stake in Mazda in order to raise desperately needed cash. Ford has since released an official statement describing the media reports as pure speculation and added that there was nothing to announce. In Japan, however, talk of share sales continues to build, and now Mazda may be looking to buy back some of its own stock.
Earlier this week, Japan’s Nikkei business daily reported that Ford recently approached Japanese automotive parts supplier Denso Corp. to buy a portion of its stake in Mazda.
Denso on its behalf issued a statement on its official website that creates more questions than answers. “Today a Japanese newspaper reported that DENSO is considering the purchase of shares of Mazda Motor Corporation from Ford Motor Company. DENSO has not announced any information regarding this article. DENSO does not have any information to disclose at this moment,” said the company’s press release.
If Mazda buys the shares that Ford is expected to release, it could be a boon to Mazda. By decreasing its holding, Ford will lose its controlling interest in the company. Ford has held its 33.4% stake in Mazda for three decades now, but with Ford shares at a 20 year low, and coupled with America’s credit crisis and a credit rating moving deeper into junk status, it will soon have to look at other avenues of raising needed cash.
Industry analysts see the removal of Ford‘s influence as a benefit to Mazda‘s future, reports The Detroit News. “It finally clears a cloud over Mazda. Having new stable shareholders will eliminate worries about Ford‘s move on Mazda‘s stake,” said Koji Endo, of Credit Suisse Securities (Japan) Ltd. in Tokyo.
Several Ford and Mazda models are closely linked and share a number of components and platforms. The Mazda2 and Mazda3, for example, are based on the same platforms as Ford’s new Fiesta and Focus (European), respectively, thus the two carmakers will be closely linked for some time to come.
Mazda posted a record profit of $1.55 billion in 2007, selling more than 1,363,000 units worldwide, and this year’s sales levels are forecasted to be higher, making it a valuable target.