Suzuki wants to buy back shares from VW

By Mayumi Negishi and James Topham

TOKYO |
Fri Nov 18, 2011 1:53pm IST

TOKYO (Reuters) – Suzuki Motor Corp said on Friday it wants to buy back the 20 percent of its shares owned by Volkswagen and is ending their two-year alliance, vowing to seek mediation if necessary, but VW said it would keep the shares.

The alliance has grown increasingly acrimonious in recent months, with Suzuki accusing the German automaker of failing to treat it as an equal partner. In September, it accused VW of breach of contract, saying its top shareholder was withholding hybrid technology.

Suzuki called on Volkswagen to release the shares to it or to a third party it specifies, adding it would seek mediation if VW did not comply. It said it would buy back the shares by November next year.

After Suzuki’s statement, Volkswagen said it would hold onto the stake.

VW bought a 19.9 percent stake in Suzuki in 2009 for about 1.7 billion euros ($2.3 billion) to bolster its presence in the Indian market for small cars.

For Suzuki, the tie-up was supposed to give access to technology it could not afford to develop on its own, but the partnership has failed to deliver any meaningful cooperation.

Suzuki was holding a media briefing on the matter from 5 p.m. (0800 GMT).

($1 = 0.740 Euros)

(Additional reporting by Jan Schwartz in Hamburg; Editing by Michael Watson)

Article source: http://feeds.reuters.com/~r/reuters/INbusinessNews/~3/bA7Dm3sS0uo/idINIndia-60598920111118

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