Daimler set to take stake in Mitsubishi trucks

DaimlerChrysler is poised to announce the acquisition of a minority stake in Japanese partner Mitsubishi Motors Corp's Fuso trucks unit on Friday, industry sources said today. The deal, already signalled by both companies, is part of DaimlerChrysler's strategy of improving its presence in the huge Asian trucks market and will enable it to save money on costly commercial vehicle engine production. Under the deal Mitsubishi will split the Fuso division off into a separate company. Japanese daily newspaper Yomiuri Shimbun reported DaimlerChrysler would take a 43 percent stake in the trucks business while Mitsubishi would have a 42 percent holding and several other Mitsubishi group firms would control the remaining 15 percent. DaimlerChrysler, the world's biggest truckmaker, already has a 37 percent stake in Mitsubishi, Japan's number four carmaker. DaimlerChrysler's supervisory board met at the German-U.S. group's U.S. headquarters near Detroit on Thursday to discuss the company's trucks strategy in Asia and also made some minor management board announcements. Industry sources said the trucks deal would be announced on Friday. The total deal by DaimlerChrysler and the Mitsubishi group firms would be worth around 110 billion yen ($906 million), the Japanese newspaper said. About 10 billion yen would go towards the new firm's capital. Of the rest, around 60 percent would go towards Mitsubishi Motors' capital reserves and 40 percent towards the new company's capital reserves, Yomiuri Shimbun said. Mitsubishi declined to confirm the report and DaimlerChrysler declined to comment. "We are still in the final stages of talks and the details have yet to be finalised," said Mitsubishi Motors spokesman Toru Kawahata. Asia accounts for nearly half of all global commercial vehicles sales, but DaimlerChrysler has to date relied on its Mitsubishi partnership for truck sales in the region. Splitting off the truck division would give DaimlerChrysler stronger control of the best part of Mitsubishi. But some analysts have said investors in Mitsubishi could lose out because the division is widely considered the jewel in its crown despite being battered by a decade-long slump in Japanese domestic truck demand. Executives at the truck division have also argued that separating it would result in better allocation of resources.