Suzuki Motor Corporation hasn’t had much luck with the nitty-gritty of its financial divorce from Volkswagen Group.
Buying back VW’s 19.9% Suzuki stake for £2.45bn on 16 September allowed the Germans to walk away with more than double their original investment. However, Suzuki waited a crucial week too long before reciprocating through an agreement to sell its much smaller cross-shareholding in VW. If the two transactions had been simultaneous, the Japanese would have been substantially better off.
Sadly, the second deal was executed on 25 September, by which time VW’s share price had plunged by more than 30% in the wake of that company’s culpability in a global diesel emissions cheating scandal. On 16 September, the 4.397 million ordinary shares Suzuki held would have been worth £544m. Nine days later, their value had declined to £375m. A face-saving statement said: “Owing to provisions in the agreement, Suzuki refrains from disclosing purchase price.”
Nevertheless, Suzuki did notify a gain of £202m on the disposal — £169m less than it would have got had the senior executives responsible been quicker on their toes. This tranche of VW stock was sold to Porsche Automobil Holding SE, a VW Group majority shareholding entity owned by the Porsche and Piech families.