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VW Must Sell Its Stake in Suzuki
Volkswagen AG has been ordered to sell its stake in Suzuki Motor Corp. by the International Court of Arbitration of the International Chamber of Commerce.
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Volkswagen AG has been ordered to sell its stake in Suzuki Motor Corp. by the International Court of Arbitration of the International Chamber of Commerce. Suzuki says it will buy back the shares.
The ruling settles a four-year-old disagreement between the companies over the unwinding of their brief and unproductive partnership.
Suzuki and VW launched the alliance in 2009 when VW bought 19.9% of Suzuki and Suzuki acquired 1.5% of VW. The companies had hoped the partnership would help VW develop inexpensive small cars and give Suzuki access to advanced diesel and hybrid powertrain technologies.
But major differences in corporate culture stalled the efforts, prompting Suzuki Chairman Osamu Suzuki to declare in September 2011 the company "wanted a divorce." Suzuki sold its stake in VW and submitted a notice of termination in November 2011. But VW refused to sell its shares in the Japanese minicar maker.
The court ruled the partnership was ended as of May 2012. VW has agreed to sell its Suzuki holding. Suzuki must compensate VW for breach of contract by paying an amount to be set in a second stage of arbitration.
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