According to Reuters, Suzuki Motors recently announced that it has ended its alliance with Volkswagen. At the same time, it will seek arbitration from the International Court of Justice, forcing Volkswagen to let it repurchase 19.9 percent of Suzuki shares held by the latter. Volkswagen said that Suzuki’s forced repurchase of shares was "lack of legal basis."
Suzuki decides to use arbitration to publicly deny its legitimacy On November 18, Suzuki president Osamu Suzuki stated: "As the public does not cooperate in accordance with the agreement, the alliance lacks the basis for sustaining the alliance. At present, we are prepared to integrate Suzuki and Volkswagen. The relationship was restored to its original state as an independent party and not subject to the other party's constraints.†Suzuki revised even regretted that he had agreed to establish a coalition. Yasuhito Harayama, executive vice president of Suzuki, stated at the Tokyo media meeting that he would use court arbitration to force the public to agree to Suzuki’s repurchase of shares. At the same time, “Arbitration means that the decision is binding, and this is our purpose."
Kang Ren Yuan Shan also revealed that Suzuki will leave the public with "some time" to continue negotiating equity matters before applying for arbitration, and emphasizes that arbitration will be held in a "neutral third country" court, and arbitration may take up to 18 months or two years.
Volkswagen’s Arbitration argument against Suzuki later stated that it lacked a legal basis for recourse to arbitration and denied Suzuki’s remark that the public failed to implement cooperation agreements and provide advanced engine technology. Volkswagen also said that despite facing the shackles of the alliance's disintegration, it still holds Suzuki’s equity as an “appealing investmentâ€.
The dispute recalls that Volkswagen is expected to impact the leading position of global auto companies in 2018, and Suzuki dominates the emerging Indian market. The two sides formed a coalition in December 2009 in cooperation with capital and technology exchanges in line with the original intention of combining the advantages of each other. . Volkswagen acquired 19.89% of Suzuki's shares for US$2.5 billion, while Suzuki also holds a 1.5% stake in VW.
However, since March 2011, the relationship between the two sides has gradually deteriorated and they have been caught up in a confrontation. At the time, Volkswagen said in its report that Suzuki’s “financial and operational guidelines†could be considered as an “association company†and that it was protested by Suzuki.
On September 11, 2011, Volkswagen accused Suzuki of violating the agreement by purchasing diesel engines from other manufacturers. The next day, Suzuki repaired the refutation of "default" and complained that the public had excessively interfered in Suzuki's operations and infringed Suzuki's independence.
On Sept. 12, Suzuki Motors announced plans to terminate its alliance with Volkswagen and asked the public to sell their shares in Suzuki. There is still no sign in the public that it will agree to terminate the partnership.
In the event that the alliance with Suzuki Motors is on the verge of disintegration, Volkswagen Group considers the acquisition of Suzuki Motor to maintain the cooperation between the two parties. On September 18th, 2011, German Der Spiegel quoted an anonymous public executive saying that “doesn't rule out the possibility of mass mergers and acquisitions of Suzuki.†As a result, the public’s concept was taken as a hostile takeover, and it even failed. And finally.
In mid-October, Volkswagen still insisted on refusing to give up its ownership of Suzuki, and on several occasions, it took the initiative to “shake the olive branchâ€, none of which had changed Suzuki’s heart.
At the end of October, during the third quarter earnings report, Volkswagen claimed that Suzuki was no longer an ally, overturning the previous statement that it was trying to prevent the deterioration of the alliance. It said: "The chance of exerting a significant influence on Suzuki Motors has now disappeared." At the same time, it added that Suzuki has been classified as "other shares."
Suzuki decides to use arbitration to publicly deny its legitimacy On November 18, Suzuki president Osamu Suzuki stated: "As the public does not cooperate in accordance with the agreement, the alliance lacks the basis for sustaining the alliance. At present, we are prepared to integrate Suzuki and Volkswagen. The relationship was restored to its original state as an independent party and not subject to the other party's constraints.†Suzuki revised even regretted that he had agreed to establish a coalition. Yasuhito Harayama, executive vice president of Suzuki, stated at the Tokyo media meeting that he would use court arbitration to force the public to agree to Suzuki’s repurchase of shares. At the same time, “Arbitration means that the decision is binding, and this is our purpose."
Kang Ren Yuan Shan also revealed that Suzuki will leave the public with "some time" to continue negotiating equity matters before applying for arbitration, and emphasizes that arbitration will be held in a "neutral third country" court, and arbitration may take up to 18 months or two years.
Volkswagen’s Arbitration argument against Suzuki later stated that it lacked a legal basis for recourse to arbitration and denied Suzuki’s remark that the public failed to implement cooperation agreements and provide advanced engine technology. Volkswagen also said that despite facing the shackles of the alliance's disintegration, it still holds Suzuki’s equity as an “appealing investmentâ€.
The dispute recalls that Volkswagen is expected to impact the leading position of global auto companies in 2018, and Suzuki dominates the emerging Indian market. The two sides formed a coalition in December 2009 in cooperation with capital and technology exchanges in line with the original intention of combining the advantages of each other. . Volkswagen acquired 19.89% of Suzuki's shares for US$2.5 billion, while Suzuki also holds a 1.5% stake in VW.
However, since March 2011, the relationship between the two sides has gradually deteriorated and they have been caught up in a confrontation. At the time, Volkswagen said in its report that Suzuki’s “financial and operational guidelines†could be considered as an “association company†and that it was protested by Suzuki.
On September 11, 2011, Volkswagen accused Suzuki of violating the agreement by purchasing diesel engines from other manufacturers. The next day, Suzuki repaired the refutation of "default" and complained that the public had excessively interfered in Suzuki's operations and infringed Suzuki's independence.
On Sept. 12, Suzuki Motors announced plans to terminate its alliance with Volkswagen and asked the public to sell their shares in Suzuki. There is still no sign in the public that it will agree to terminate the partnership.
In the event that the alliance with Suzuki Motors is on the verge of disintegration, Volkswagen Group considers the acquisition of Suzuki Motor to maintain the cooperation between the two parties. On September 18th, 2011, German Der Spiegel quoted an anonymous public executive saying that “doesn't rule out the possibility of mass mergers and acquisitions of Suzuki.†As a result, the public’s concept was taken as a hostile takeover, and it even failed. And finally.
In mid-October, Volkswagen still insisted on refusing to give up its ownership of Suzuki, and on several occasions, it took the initiative to “shake the olive branchâ€, none of which had changed Suzuki’s heart.
At the end of October, during the third quarter earnings report, Volkswagen claimed that Suzuki was no longer an ally, overturning the previous statement that it was trying to prevent the deterioration of the alliance. It said: "The chance of exerting a significant influence on Suzuki Motors has now disappeared." At the same time, it added that Suzuki has been classified as "other shares."
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