DaimlerChrysler Sells Hyundai Stock for Over $900 Million

DCX Acquisition of 10.5 Percent Stake in Hyundai Motor Proved Good Investment

DaimlerChrysler is cash rich to the tune of $912 million after selling off its Hyundai Motor Co. Ltd stock yesterday. The worlds fifth largest automaker owned 10.5 percent of South Koreas largest automotive firm, but due to losses in its Mercedes-Benz division and only recent positive gains by Chrysler Group, the capital is needed to strengthen from within.

“Our proceeds were just over $900 million,” a DaimlerChrysler spokesman commented.

The automaker was quick to state that it has no intention of pulling out of current or future projects it has partnered with Hyundai on, including the joint venture engine plant that Mitsubishi Motors Corp. is also in on.

“Our projects continue, world engine and the like,” the spokesman added.

Part of DaimlerChryslers deal with Hyundai includes disturbing some of the Korean automakers models in Mexico. The two companies also are involved in some joint purchasing.

Was it a good investment? On paper, at least, it looks like it was a very good move. DCX purchased 10 percent of Hyundai in June of 2000 for $428 million, raising its stake again in 2001 to 10.5 percent. In total, the German automaker paid approximately $570 million for the entire 10.5 percent stake.

Goldman Sachs acted as broker, selling off 45.8 million in global depositary receipts to financial institutions. The shares fetched $19.92 apiece. To speed the sales process the Hyundai stock was offered at discounted prices, selling for 5 percent under the current trading price.

The sale of Hyundai Motor stock shouldnt come as a surprise, being that on May 12 both companies announced the DCX would divest after kyboshing a joint commercial vehicle venture.

Despite Hyundais growing presence on the world market, the move is seen as positive in DCX camps.