Indiacar News-Daimler exits Tata Motors; sells 5.34% stake for Euro 300 mn

Sign In

-• India's most trusted automobile portal since 1999
-• 4,00,000 + pages of information
-• 0.5 million visitor sessions each month

Participate in Car Owner's Survey

New Car

Used Car

Auto News

Indiacar Mall

Finance and Insurance

Auto News

Archives June 10 | News 1 Yr Ago | News 2 Yrs Ago

Back	Search
News in Detail

Daimler exits Tata Motors; sells 5.34% stake for Euro 300 mn

German auto major Daimler on Tuesday said it has exited Tata Motors (Q,N,C,F)* by selling its residual stake of 5.34% in the Indian firm for about 300 million euros (over Rs 18.55 billion).

The shares were sold to various groups of investors, including Tata Sons and Citi Group through the capital market.

``Tata Motors`` share price has risen significantly especially last year, so Daimler will receive a substantial cash inflow of approximately 300 million euros from the sale of its shares,` Daimler said in a statement.

However, according to the information available on the Bombay Stock Exchange (BSE), Daimler sold 2.56 crore shares of Tata Motors at a price of Rs 751.67 a piece fetching Rs 1,924.01 crore.

The transaction will have a positive effect on Daimler`s pre tax earnings at about 265 million euros (about Rs 1,638.89 crore), the statement added.

Meanwhile, shares of Tata Motors have declined over 3% on the BSE.

The stock opened on a weak note and soon fell 5.87% to touch a low of Rs 750.

The scrip finally settled the trade at Rs 770.90, down 3.24% over previous close.

The promoters of Tata Motors hold 38.08% stake in the company, of which Tata Sons holds 27.13%, while the rest is held by other group companies.

Explaining the reasons for the stake sale in Tata Motors, Daimler said it is in an `excellent position` to capitalise on the potential of Indian passenger and commercial vehicles (CV) market and will continue to intensify its own activities there.

`An equity participation of Daimler in Tata is, therefore, no longer necessary. This has been done in full consultation with Tata. Relations between the two companies are excellent and will not be adversely affected by this sale,` it said.

Daimler is setting up a new CV facility in Chennai and plans to roll out trucks by 2012 under a new brand name, which it did not disclose.

``The production of trucks for export to other emerging markets will follow at a later date,` it added.

Currently, Daimler sells its Actros range of trucks in India, assembled at its Pune plant.

Daimler said despite the global financial crisis of 2008-09, the company is strengthening its business in both car and CV segments in India, adding that its group company Mercedes Benz is one of the leading players in the luxury car market in the country.

In 2007, Tata Motors had given a `no objection` to the German firm`s plans to set up its independent CV business in the country.

They entered into collaboration with Daimler Benz way back in 1954 for manufacturing commercial vehicles.

When Daimler started manufacturing Mercedes-Benz cars in the country in 1994, it began as a 51:49 joint venture between Daimler and Tata Motors, then known as Telco.

Source : Myiris.com (3/10/2010)