VW to buy 20% stake in Suzuki

Volkswagen is to buy a 20% stake in Japan’s Suzuki Motor for 222.5bn yen ($2.5bn; £1.5bn) as it continues to bid to increase its group size.

Volkswagen

Suzuki said it would acquire a stake in VW in return, spending “up to one half” of the funds it receives on VW shares. In a joint statement the two carmakers said that they had “reached a common understanding to establish a close long-term strategic partnership”.

The moves come just a day after VW completed an agreement to take a 49.9% stake in Porsche AG, clearing the way for the two brands to merge and former an integrated company.

VW chief executive, Martin Winterkorn, says: “Two of the world’s leading carmakers are joining forces and preparing to meet the growing challenges that lie ahead. Together we can maximise our opportunities for growth.”

VW Group is eyeing up the creation of an integrated automotive group, which will conclude with the merger of Volkswagen and Porsche during the course of the same year.

The new group is looking to further expand its position in the premium business, which offers particularly strong earnings. it estimates annual operating profit of the Volkswagen Group will increase by some €700m in the long term.