• Mar 9th 2010 at 6:00PM
  • 7

Daimler has been hit hard by the weakening global demand for luxury automobiles, as evidenced by the German automaker's larger than expected 2009 losses and the company's decision to cut its dividend for the first time in 14 years. Automotive News reports that Daimler is looking to raise money to rebuild its business in developed regions by selling its 25.6 million shares of Tata Motors stock. The move would reportedly net the German automaker an estimated $429 million, four to seven percent below market value. Shares of Tata Motors stock are up 19 percent since February 26, so Daimler stands to earn some serious coin from the share sell off.

AN quotes Juergen Pieper at Metzler Equities as saying "we certainly now have as a priority turning around the mature markets and then China. This is certainly now a higher priority for Daimler than India." And while Daimler is selling, it appears that Tata isn't buying, stating that its collection of companies isn't interested in purchasing the shares. Daimler is looking to sell the stocks on the open market in block deals, which moves large amounts of stock at once.

Daimler's break from Tata will be likely be a clean one considering the two companies reportedly don't have any joint ventures or collaborative projects in the pipeline. Analysts reportedly don't foresee Daimler's sale of Tata shares affecting the Indian automaker's stock price.

[Source: Automotive News - Sub. Req. | Image: Sascha Schuermann/AFP/Getty Images

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    • 1 Second Ago
      • 5 Years Ago
      Tata & Daimler have had a long history, going back 60 years. Infact, Tata Motors began manufacturing Benz trucks in India. Later, Mercedes entered India by having Tata assemble its cars there 20 years ago.

      These days Daimler sees Tata as a competitor & not a collaborator. Mercedes faces competition from Jaguar/LR in luxury cars, Trucks & Buses from Tata-Daewoo.
      • 5 Years Ago
      After what they did to Chrysler and their talent, Daimler can roll over and die as far as I am concerned.
      • 5 Years Ago
      I agree with BigED!!
      • 5 Years Ago
      seems they were just delaying this for last year or two but this was going to happen
      perhaps Dailmler were waiting till selling off activity would be more profitable but otherwise they were turning soar since the day TATA started bidding for JLR

      Interestingly, I heard the news that they were actually interested in gaining controlling rights of TATA Motors before this JLR auction went off
      and this is obvious that Daimler wants to strengthen their foothold in EU and focus on China
      certainly Chinese market has more potential for luxury cars than here in India
      • 5 Years Ago
      Mercedes may regret this if the Indian market takes off.
      • 5 Years Ago
      Tata-Benz products in India were rugged and reliable. Last time I went to India, I saw tons of Tata-Benz "lorries" (trucks) with the 3 pointed emblem driving around. Most of them were built in the mid 80's to early 90's if I'm not mistaken. Sad to see that collaboration end.
      • 5 Years Ago
      Best thing for Tata is the have Count Diamler sell them off, Before the blood gets sucked out of them.
      Diamlers` hooks were too deep in Chrysler, still are as long as the 300 is on the Diamler platform.
      It will be a good day for Tata.