Ford sells 20 percent of Mazda
19 Nov, 2008
31 Comments 
Mazda has today announced that several of its strategic business partners will acquire 20 percent of Ford’s shares the company via market trading.
As a result, the ratio of Ford’s ownership of Mazda stock will be reduced from 33.4 percent to just over 13 percent, with the new agreement allowing the two companies to continue their strategic relationship that spans nearly 30 years.
“The sale of Mazda shares by our partner, Ford, will not result in any change in Mazda’s strategic direction and we will continue to accelerate our product-led brand improvement and cost innovation initiatives,” says Mazda’s Chairman, President and CEO, Hisakazu Imaki. “We will continue our strategic relationship through our ongoing joint ventures with Ford, as well as the sharing of platforms and powertrains.”
“This agreement allows Ford to raise capital that will help fund our product-led transformation, and at the same time, allows Ford and Mazda to continue our successful strategic relationship in the best interest of both companies,” said Ford President and CEO Alan Mulally.
Ford’s sale of the Mazda stock will be achieved through Mazda and a group of Mazda’s strategic business partners each buying a portion of the shares.
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November 19th, 2008 at 12:32 pm
Good news for Mazda, who get all the benefits of the part sharing, but none of the Ford management issues.
I think Mazda learn’t a lot when they went bad in the ninties and will really capitlise on this seperation from Ford. Not least they can now openly and agreesively compete again’st Ford equivalent products. When was the last time you heard Mazda Australia, directly compare their cars agains’t Focus and Mondeo for instance? Now they can. :)
Dan
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November 19th, 2008 at 1:24 pm
Dan, did you read the press statement/article? Ford still own just over 13% of Mazda, and they are quote “going to continue their ongoing ventures, as well as sharing of platforms and powertrains”. These platforms will continue to be shared by both Mazda and Ford, eg. B, C and Ranger/B-Series.
And I think you’ll find that, just because all of a sudden Ford have sold/lost 20% share in Mazda we won’t magically see Mazda come out and start running ad campaigns with Mazda vs. Ford.
Maybe read up on the auto industry before making such a comment.
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November 19th, 2008 at 1:38 pm
Big_End_Bearing…
Couldn’t agree more. Some so called auto enthusiasts don’t know basic auto information.
It’s business as usual, the difference being Ford has been able to shore up some much needed cash.
They also could buy back some shares once Ford becomes healthy in the US again.
People also forget that Ford saved Mazda from colapse back in the mid 90’s.
Ford and Mazda have been one few success stories of automotive tie-ups.
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November 19th, 2008 at 2:09 pm
FORD better be wiser with there design ethos as they have done many average cars that dont sell well. It stuns me how people on here defend them - and conveniently forget they have had average sales success for ages (since they terrible release of the AU back in 1998)
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November 19th, 2008 at 2:14 pm
What has that got to do with this topic??
Besides toyota has and still produces some of the most boring styles around.
Have a look at the new fiesta…
It amazes me how some start bashing Ford for no good reason also.
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November 19th, 2008 at 2:28 pm
Take a look at the manufacturers Ford has had a share in over the past 10 years.
Volvo, Aston Martin, Land Rover, Jaguar, Mazda.
All of them are now at their best product wise!
Is that just a coincidence?
The Ford-Mazda partnership has benefitted both sides!
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November 19th, 2008 at 3:39 pm
Agree with you Adam. The Fiesta is stunning……just took yonks for Ford to change its tune. And in mean time sales dwindled! Are you happy with that…..cause I aint! Makes it easier for Toyota to pinch sales!
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November 19th, 2008 at 3:53 pm
Obviously you attribute style with Fiesta and looking back at range all back to 1998 with AU release - seems like your impressed with models Ford have. Reality is opposite as simply put “THEY DONT SELL AS FUGLY AS”.
Thankfully that is “finally” being corrected with new wave of Ford kinetic look. Still for me it has taken “way too long” for Dearborn to embrace it and those same people should be punted as they cost sales and progress through tiresome decisions in regards to model line up world wide.
Toyota and others in meantime plough ahead and release updates and new models - and where is Ford. I tell you were - left behind quickly!
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November 19th, 2008 at 3:58 pm
uhuh.
If i wanted drama i’d watch home and away.
Lets move forward.
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November 19th, 2008 at 6:02 pm
Excuse me if I’m slightly confused, but if ’several of Mazda’s strategic business partners’ are paying out Ford for 20% of the 33.5% that Ford owns of Mazda, does this not mean that Mazda and its partners now have a chunk of Ford? Is this not the start of the reverse takeover?
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November 19th, 2008 at 6:20 pm
No Captian, you ARE confused (as usual? lol)
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November 19th, 2008 at 7:29 pm
Ha ha ha ha ha
even if Dan Dacey (first poster) read at least the headline, he might have had more of an idea.
this is a very smart move i reckon.
what was effectively in place was a company owning its own shares.
this arrangement wont change a thing. it will raise coin for both companies and thats it.
its obvious the mazda/ford alliance is highly beneficial to both parties equally, so why would either want the other gone??
ford has kept 13% to ensure they still control mazda (or mazda cant stitch them up),
and is splitting that 20% over 20 companies meaning once again ford is the main controller.
the money they make from this will raise enough to fund a couple of products to be developed, and thats great news
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November 19th, 2008 at 7:30 pm
thats a left fielder from captain ^^^
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November 19th, 2008 at 7:35 pm
No, thats 20% of Ford’s stake in Mazda. not 20% in Ford.
There will be partnerships, but Mazda is now more independent and can call the shots more openly now.
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November 19th, 2008 at 7:51 pm
OK Bret, I’d be happy for you to explain why I’m confused, because I can’t. All I can see is the arithmetic.
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November 19th, 2008 at 8:40 pm
Geepers…..your colours show. If I wanted blue blood then look no further then Adam. The difference between me and you is I wont get heckles up for one car maker. Its obvious you accept Ford’s designs which “dont” equate to sales. And yes…..I like what designs Ford have got. Only if they truly implement them and make them sooner rather then later as to be frank they have been way too long releasing models or updating them. Obviously this basic fact eludes your blue blood!
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November 19th, 2008 at 10:46 pm
Jobber,
The “shot calling” percent wont change at all
Ok lets say mazda has been heavily influenced by shots called by ford with the direction they are heading, platforms that are built and designs that hit the road,
wouldnt that mean they would be up the creek now because what they have built up to this day (which amounts to great success) is due to fords influence??
if ford is apparently dragging Mazda down, then how come it is seeing great success which can be traced back to fords involvement with them???
nothing will change, only the day.
oh, and they have just picked themselves up a lazy million. Mazda will also benefit from fords new found funds
some people just dont get it………
Allan Mullaly is being praised for his cool headed quick thinking in adapting to the new climate.
he has actually raised quite a bit of funds to be able to shift their direction.
Better to do that than have to hit the government like GM
This clever sale has just picked up a lazy billion which would fund a couple of new model developments.
Im sure ford didnt pay a billion for it initially.
this is no different to ford having held shares in their very own company.
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November 20th, 2008 at 4:07 am
It appears that the market disagrees. Fords total value has in the first 3 hours of trading in usa today plummetted 22%. GM is a close 2nd with a drop of 15%.
The other auto manufactures have had small losses of around 4%
I think all hope is pretty much gone now, for GM at least. Their only option is to invoke chapter 11. Which from what I understand isn’t a bad thing if you’re a shareholder. It basically means the company doesn’t have to honour all the pensions and high labour contracts caused by the unions and can maybe make a little money so shareholders don’t lose everything.
It’s just a matter of time. I predict GM will have filed for bankruptcy before Obama is sworn in.
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November 20th, 2008 at 4:12 am
Although you are right in that the strategic value in the stake in mazda is not lost Andrew M, the problem is, that 20% loss of ownership is 20% less of mazda revenue and net profit that would have ultimately filtered back into Ford. (I think mazda is operating at a profit?) It’s really a short term gain for a long term loss. But I spose there isn’t really an alternative and the company has to focus on keeping afloat.
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November 20th, 2008 at 10:22 am
Captain,
It’s really quite simple: What is being traded here are shares in MAZDA. What the buyers are buying are shares in Mazda.
There are no Ford shares on offer in this deal.
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November 20th, 2008 at 10:45 pm
RoFlmaTiC,
you are just guessing it is a worse decision.
one would have to know actual profit, and what sort of a return ford gets from mazda for each of its shares.
I’d reckon it would take a while for them to get a billion big ones in return on their investment in mazda.
It could almost be termed like investment property owners who do up hiuses and sell them.
whet ford has done is “do up” mazda and then sell some to make a profit.
now what they will probably do is put that billion into investing in themselves to see a return on that investment.
what they have done is shifted where they have their money invested, and the big bonus is they can still keep a beneficial marriage between the 2 still going
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November 21st, 2008 at 2:19 am
Maybe Andrew M, however to continue your analogy, if you’re renovating and selling houses, would you sell your house in during a boom or a huge trough?
If Ford sold Mazda 3 months ago they would have got 4 times as much for it!!!
Although I do think the sale had to be done, it was motivated by desperation more than anything else.
The sale worked out to be valued at 550 million USD. To put this into perspective, Mazda made an operating profit of 60.7 billion yen in the first half of 2008, and net income was 29.7 billion yen (313 million USD).
Off course the profits will be much more bleak in the future, but lets just put it this way - there was a reason that Ford had no problems finding buyers for that stake.
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November 21st, 2008 at 2:25 am
And breaking news (well as I am writing this).
US congress have refused to bail out the big 3 US auto manufacturers.
The share price of GM has within 10 minutes dropped more than 40%!!!!
Give a week at the most. GM will be filing for chapter 11.
Ford is being hit hard to, shedding another 20% from yesterdays losses.
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November 21st, 2008 at 2:26 am
^^
hmmm I posted another post before that one but it is awaiting moderation :(
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November 21st, 2008 at 6:16 pm
Ok, to continue with it,
if you were renovating and the trough came along, would you sit on that investment for another couple of years??
if you are still going to make money sometimes the market value isnt all that important.
do you reckon all those that bought houses 10 years ago really care that what they paid 60K for will only fetch $300,000 versus the $320,000 it would have fetched 6 months ago???
I doubt they would be slitting wrists.
say you have bought a house, paid 200k, valued at 300K, and you spent 40-50K on it.
at the moment its only gonna sell for 300K but at the peak time 320K.
do you carry that investment for another 24 months than originally planned and have 250K tied up in it? or sell now and run with that 50K??
by that time the extra interest you will pay on 250K will out weigh by as much as 2 times what you have missed out on by selling at the low point
Oh and just to be noted, the whole 20% wasnt sold to one company. it was split to around 20 companies.
as far as it being an investment, it works out at around a 11% return on investment to those who bought a share.
yes, a solid return, but its still a fair price for ford to recieve for it, especially in these conditions.
each 1% share would have cost 27.5 million.
in this current climate i dont know how they found investors to invest that sort of coin in the auto industry (which is on edge) for such a low return
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November 22nd, 2008 at 1:50 am
The value of mazda is 25% of what it was 3 months ago. We’re not talking 320k vs 300k!!!
Also that 313 million dollar profit was for only the first 6 months of this year. So the return on profit would be 22%. (Though this should be discounted to reflect the current downturn).
Hard to say really, in the circumstances it is the right move. I’m no expert, but with the way the market reacted to the news a couple of days ago…
However on the other hand US congress reversed its decision last night, I read it this morning. Huge spike in the share price for both GM and Ford. Those with the guts to buy shares after that miniature crash would have almost tripled their money in less than an hour!
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November 22nd, 2008 at 6:44 am
ANDREW M……My other half has a brand new fully optioned Falcon XT and its hot. The inside is nice…….bar one major faux paus. The dash is to far poking into cabin space and then has a sharp angular point to it just above glovebox which looks odd and eyesore. The seating is significantly better as “finally” one sits into seat whereas previous Falcon you sat awkwardly on top of it. The side bolsters still appear softish and should be harder. Its a nice step up……not that significant a massive gap to Commodore as you elude but. That pointy intruding dash is way too much into cabin hey!
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November 22nd, 2008 at 6:36 pm
Mazda should concentrate on continuing to deliver quality cars and bring back real performance to their so-called sports cars. More focus on the rotary engine perhaps, bring back turbo rotaries and put it in the Mazda3 MPS, MX5, RX7 & RX8 and I’ll buy the first one that becomes available.
Ford need to work out how to build a quality car and finally produce it for Australia. I am tired of going to test any new Ford and finding it to be far below average quality. A couple of genius design features maybe, but overall the product is rubbish. Just go get in a taxi to see for yourself and talk to the cabbie about the car. I do nearly everytime I get in a cab with a driver who speaks English. Every single one of them has bad words to say about Ford and nearly all of them don’t own a Ford for their own family drive. I think that says a lot considering most of them are sitting in a car they drive 200,000kms per year.
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November 23rd, 2008 at 2:00 pm
RoFlmaTiC,
are you saying mazda has lost 75% in under 3 months???
i havent seen the stats but i find that hard to believe.
wouldnt that put it worse off than GM??
Also, my mistake, i missed that the 313 figure you stated was only half the year.
either way i think ford needed to do it.
they dont lose anything out of the sale. they will still be as much a part of mazdas development today as they were pre the sale.
what this has done is allowed then to take some cash and invest it in their own company to cater for the sudden change in the industry.
of course Mazda will benefit from the development ford undertakes with this new found cash as well.
the return ford was getting from its mazda shares would take at least 5 years to see such cash raised.
ford needs to try and get ahead of the 8 ball now because otherwise lost sales dueto inability to develop new models today, will cost them more than the income lost from not having mazda shares
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November 23rd, 2008 at 3:43 pm
Andrew M,
investing.businessweek.com/research/stocks/snapshot/snapshot.asp?capId=729388
When I looked the share price was trading around 160 yen. As you can see they were in excess of 600 yen a few months ago.
I wouldn’t go so far as to say it has been as bad as GM, whose value has been declining well in advance of the current downturn. They have dropped 96% of their value since 2000!
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November 23rd, 2008 at 5:00 pm
Quote Big_End_Bearing “And I think you’ll find that, just because all of a sudden Ford have sold/lost 20% share in Mazda we won’t magically see Mazda come out and start running ad campaigns with Mazda vs. Ford.” unquote.
It hasn’t stopped Ford from running an ad campaign dissing Mazda however. The recent ad for the Focus bagged out the 3. I was actually quite surprised when I saw it…
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