Suzuki ‘Divorces’ Volkswagen Partnership; Japanese Car Maker To Buy Back Shares

Suzuki will reportedly buy back its shares previously owned by German-car manufacturer, Volkswagen. Volkswagen or VW, will sell its 19.9 percent share after Suzuki's request to end its cooperation after four years of being partners.

According to the Independent, after Volkswagen purchased the shares from the Japanese automaker from 2010, it failed to yield even a single joint project, which led to Suzuki requesting to end the partnership. The value of the share, which Volkswagen bought for $3.8 billion or 222.5 billion yen, was based on last Friday's closing price.

Suzuki reportedly, will buy back the said shares as reported by Reuters. The decision came after the International Court of Arbitration of the International Chamber of Commerce ruled that Volkswagen should sell the almost 20 percent share.

Both companies, however, welcomed the ruling and Suzuki Chairman and CEO Osamu Suzuki said that, "It used to feel as if a small bone were stuck in my throat, I feel so refreshed now."

Suzuki proclaimed that this move will not affect its full-year earnings as it was reported that it shares climb to as much as 4.6 percent on Monday. However, it fell 0.8 percent to 4,118 yen as of 11:09 AM in Tokyo trading, Bloomberg reported.

JP Morgan analyst Akira Kishimoto wrote in a report that, "While we believe investors might react favourably to news of the share buyback, we basically think all of this is already priced in."

Suzuki, however, faces the prospect of paying damages after the arbitrators of the International Chamber of Commerce also ruled that the Japanese automaker breached the agreement with Volkswagen.

But Suzuki declared that it has turned "misfortunes into opportunities" before and will take their time to review their options. Osamu Suzuki declared that one thing is clear. It won't be working with Volkswagen again. "You don't remarry someone who you've divorced."

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