Ford to sell Mazda – Mazda to buy Mazda???

October 17, 2008

With rumors circulating that Ford is looking at selling Mazda (or at least some of its 33.4% share), it is becoming more apparent that these rumors are in fact true. Tokyo analysts think that a deal that could “clear a cloud over Mazda” is impending. Nikkei English News also has reported that Ford has approached Japanese supplier Denso to purchase parts of its share in Mazda, but the Japanese news agency didn’t claim any sources and Denso has declined comment in the matter.

Most are guessing that potential buyers would include Mazda itself, as well as a number of companies over which the risk of investment could be spread, while Ford would likely hold on to at least some of its stake in the brand but lose its controlling share of the company.

Management from Ford and Mazda are largely silent regarding any possible deal, but Mazda spokesman Ken Haruki said that “nothing has been decided,” which doesn’t sound like much of a denial. There is no question that Ford needs cash to get through these turbulent economic times, and its share of Mazda is currently worth $1.33 billion based on Wednesday’s share price, which itself has dropped 56% in the past year. The ownership status of Mazda is likely worth more than $1.33 billion, though, and anyone taking that title from Ford will surely have to pay a premium.

Even if Ford sells some or all of its stake in Mazda, the two companies would continue to share platforms, powertrains and components for a long, long time. That will help Ford continue to enjoy economies of scale while giving Mazda good hardware without the massive development costs.

Source: Autoblog

So what should Ford do? Sell part or all of Mazda? You tell us what you think:


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