According to published reports, Swedish truck maker Volvo AB will sell its shares of Japan’s Mitsubishi Motors to competitor DaimlerChysler AG. The stock purchase is expected to be announced by DaimlerChrysler at its shareholders meeting next week.
The deal will make DaimlerChrysler Mitsubishi's commercial vehicle business partner instead of Volvo. Bloomberg, reports that Volvo, which paid $270 million for its shares, could lose up to $190 million in the deal.
Volvo bought a 5% stake in Mitsubishi Motors in 1999. Terms of that deal called for Volvo to buy a 19.9% stake in a spinoff company comprising Mitsubishi's truck and bus operations.
However, DaimlerChrysler bought a controlling 34% stake in Mitsubishi last October, which diluted the Volvo stake to 3.3% and raised questions about the future of Volvo's plans with the company.
The transaction will raise DaimlerChrysler's stake in Mitsubishi Motors to 37%, which is 3% more than the Mitsubishi Group's share.
