GM puts a cut to Subaru Ties and Toyota buys the GM shares

[silver90]

http://www.detnews.com/2005/autosins...aut-338286.htm

TOKYO - Toyota has agreed to buy 8.7 percent of the shares General Motors holds in Japanese automaker Fuji Heavy Industries, Toyota and Fuji officials said Wednesday.

The purchase by Toyota Motor Corp. will make it the top shareholder in Fuji Heavy Industries Ltd., said Toyota Executive Vice President Mitsuo Kinoshita and Fuji Heavy President Kyoji Takenaka at a joint news conference.

Toyota will spend $310.5 million.

General Motors Corp. will sell its remaining 11.4 percent of Fuji, which makes Subaru cars, in the market.

GM and Fuji agreed to dissolve their alliance and capital relationship, the two officials said.

Toyota and Fuji are setting up a steering committee to try to reach an agreement on future collaboration as soon as possible, the companies said.

Toyota has been on a roll lately, boosting sales in North America, Europe and other parts of Asia and recording booming profits. GM, based in Detroit, has been in trouble, losing $1.1 billion in the first quarter.

GM and Toyota have a long-standing partnership to share environmental technology, and they run a car assembly plant in California together, although the ties do not involve holding stakes in each other.

Toyota Chairman Hiroshi Okuda has expressed worries lately about a possible political backlash from U.S. automakers because of Toyota's bright results at a time when GM and Ford are faltering.

He even suggested Toyota raise the price of car models in the United States. Toyota raised prices soon after, but denied the move was to placate U.S. automakers.

Toyota, based in central Japan's Toyota city, holds stakes in two Japanese automakers, Daihatsu Motor Co., which makes small cars, and Hino Motors, which makes trucks.

http://today.reuters.com/investing/f...-FUJIHEAVY.XML

TOKYO, Oct 5 (Reuters) - Toyota Motor Corp. (7203.T: Quote, Profile, Research) will buy shares in Japanese auto maker Fuji Heavy Industries Ltd. (7270.T: Quote, Profile, Research) from General Motors Corp. (GM.N: Quote, Profile, Research), Japanese national broadcaster NHK reported on Wednesday.

The report came minutes after Toyota said it would hold a news conference to announce a basic agreement between it and Subaru car maker Fuji Heavy on a business tie-up. The two companies will jointly brief the press at 6:30 p.m. (0930 GMT) in Tokyo, Toyota said. Fuji Heavy President Kyoji Takenaka and Toyota Executive Vice President Mitsuo Kinoshita will attend.

GM owns 20 percent of Fuji Heavy.