Swedish truck maker Volvo is reportedly selling its stake in Mitsubishi Motors to competitor DaimlerChysler.
According to published reports, DaimlerChrysler is expected to announce the stock purchase at its shareholders meeting next week. The deal means DaimlerChrysler will become Mitsubishi's commercial vehicle business partner, rather than Volvo.
Volvo bought a 5 percent stake in Mitsubishi Motors in 1999. Plans called for it to buy a 19.9 percent stake in a spinoff company of Mitsubishi's truck and bus operations. But when DaimlerChrysler bought a controlling 34 percent stake in Mitsubishi last October, it diluted the Volvo stake to 3.3 percent and raised questions about the future of Volvo's plans with the company.
The transaction would raise DaimlerChrysler's stake in the Japanese company to 37 percent, more than the Mitsubishi Group's 34 percent share. However, Mitsubishi will have to amend its deal with DaimlerChrysler in order for the German-based company to take such a large stake.
According to Bloomberg, Volvo could lose up to $190 million in the deal. It paid $270 million for shares that today may be worth as little as $88 million.
According to published reports, DaimlerChrysler is expected to announce the stock purchase at its shareholders meeting next week. The deal means DaimlerChrysler will become Mitsubishi's commercial vehicle business partner, rather than Volvo.
Volvo bought a 5 percent stake in Mitsubishi Motors in 1999. Plans called for it to buy a 19.9 percent stake in a spinoff company of Mitsubishi's truck and bus operations. But when DaimlerChrysler bought a controlling 34 percent stake in Mitsubishi last October, it diluted the Volvo stake to 3.3 percent and raised questions about the future of Volvo's plans with the company.
The transaction would raise DaimlerChrysler's stake in the Japanese company to 37 percent, more than the Mitsubishi Group's 34 percent share. However, Mitsubishi will have to amend its deal with DaimlerChrysler in order for the German-based company to take such a large stake.
According to Bloomberg, Volvo could lose up to $190 million in the deal. It paid $270 million for shares that today may be worth as little as $88 million.
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