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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