Ford to cut Mazda stake, losing top shareholder title

Ford has been the Hiroshima-based carmaker’s biggest shareholder since 1979 when it bought 25 percent, and lifted that to a controlling 33.4 percent in 1996.

Two years ago to the day, Ford said it would reduce its interest to 13 percent to raise much-needed cash, in a move that many saw as the beginning of a distancing of the long-time partners. Ford’s stake fell further to 11 percent when Mazda issued new shares last year.

With the sale of a 7.5 percent stake, Ford will become Mazda’s fourth-biggest shareholder, Mazda Chief Executive Takashi Yamanouchi said. Chase Manhattan Bank, which had 7.1 percent as of Sept. 30, would likely move up to the top spot, he said.

In a separate statement, Ford said it planned to remain one of Mazda’s largest shareholders and committed to their partnership. It added that the reduced ownership in Mazda would allow it to “increase flexibility as it continues to pursue growth in key emerging markets.”

Ford, the only U.S. “Big Three” automaker to have avoided bankruptcy, did not elaborate, but financial sources have said it was looking to reduce its Mazda stake to gain more flexibility for its business in the heavily regulated Chinese market.

“It’s not easy for two companies in this industry to stay together over 30 years,” Yamanouchi told a news conference in Tokyo, repeating that a close, capital partnership with another automaker was “unthinkable” for Mazda.

“There’s a big message in the remaining 3.5 percent stake that Ford will hold,” he said.

Since taking control of Mazda in 1996, Ford has rescued its partner from the brink, helping it to restore its brand image through strong, stylish products such as the Mazda6/Atenza and Mazda3/Axela.

In return, Ford has benefited by tapping Mazda’s strength in the development of smaller cars. They also co-own factories in the United States, Thailand and China.

Ford will sell the 7.5 percent stake, worth 31 billion yen ($372 million), via off-auction trading through the Tokyo Stock Exchange on Friday. The shares will be transferred to “several” of Mazda’s business partners, Yamanouchi said, declining to disclose the buyers. The transaction will be completed on Nov. 25.

The news was widely expected after media reports over the past few months flagged the move.

Sources told Reuters last month that the U.S. automaker would sell most of its remaining stake in Mazda and that trading house Sumitomo Corp and other Japanese business partners of Mazda were in talks to buy the shares.

Sumitomo Corp and Itochu Corp both said on Thursday they were two of the buyers, with plans to lift their stake to about 3 percent from the current 0.4 percent.

Japanese media have reported that general contractor Kajima Corp, shipping firm Mitsui O.S.K. Lines and Sumitomo Metal Industries were also among the buyers.

Mazda’s main lender, Sumitomo Mitsui Banking Corp (SMBC), which already holds a 2.9 percent stake, will also buy more shares, moving past Ford and Master Trust Bank of Japan to likely become the third-biggest shareholder.

Excluding Ford, Mazda’s top shareholders are currently Chase Manhattan Bank, Japan Trustee Services, Master Trust Bank of Japan, and SMBC.