Suzuki Motor Corporation has acquired all of the shares Volkswagen held in the Japanese manufacturer for 460bn yen (Approximately £2.4bn)
Volkswagen previously owned 20% of Suzuki, following a deal between the two companies which was meant to include a co-operative partnership between them.
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Ana Nicholls, automotive analyst at the Economist Intelligence Unit said: "This deal ends what has been a very acrimonious partnership between Volkswagen and Suzuki. The German company bought its stake in 2010 in the hope of capitalising on Suzuki’s dominance of the Indian market (through Maruti Suzuki), which would have added to Volkswagen’s own leadership of the Chinese market. But the dispute over technology transfers soured the relationship very quickly. Suzuki has spent the last four years trying to get its stake back, making it hard for its manager to plot a long-term strategy."
Suzuki said it had first requested a termination of the business and capital alliance in 2011, however it said it did not receive a response from VW.
In November of that year, it filed a request for arbitration with the International Court of Arbitration of the International Chamber of Commerce, based in London.
At the end of August 2015, the Court told VW to divest its shares, among other findings.
Nicholls said: "The stake sale, which follows an arbitration ruling in August, comes at a good time for Suzuki, whose sales are rising on the back of strong performances in Japan and India. The company has a remarkably large international footprint for a relatively small producer, with 65 overseas subsidiaries, which gives it a good spread of risks and opportunities.
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By GlobalData"But there remains a question-mark over the company’s size: with annual vehicle sales of 2.6m (excluding motorbikes) it falls well short of the 5m normally seen as the minimum for a viable mass car producer. After their prolonged scrap with Volkswagen, managers will be wary of striking anything more than limited partnership deals. As for Volkswagen, it claims the sale will have a "positive effect on the Company’s earnings and liquidity". It is also reserving the right to claim damages from Suzuki, however, which threatens to prolong the dispute for a while longer".
Suzuki said: "At this stage, Suzuki does not foresee any need to amend its forecast for its consolidated results for the fiscal year ending 31 March 2016; however, if any matter that needs to be disclosed arises, such matter will be promptly disclosed."
