Japanese car maker Suzuki says US giant General Motors has decided to slash its stake in the Japanese affiliate from 20% to 3% but will continue with a strategic alliance.
Suzuki plans to spend almost $2 billion to buy back on the market as much as possible of the 17% stake being offloaded by GM.
GM said in a news release on its website that it expected to raise cash of about $2 billion from the share sale and record a pre-tax gain of up to $750m.
The Japanese group said the two companies would continue to co-operate in the development of technologies such as fuel cells and the move would not affect its fiscal year to March 2006 profit forecast.
GM, which has been wallowing in losses, has been the largest shareholder of Suzuki but decided to all but end the capital tie-up which dates back to 1981. Under pressure from its shareholders to sell assets, GM is also reported to be considering dumping its 7.9% stake in another Japanese automaker, Isuzu Motors.
