Suzuki has terminated its partnership agreement with Volkswagen and has demanded that the German giant returns shares transferred as part of the deal.
The two companies joined forces in December 2009 so that VW could access Suzuki’s small-car expertise and the Japanese firm could take advantage of VW’s technology.
Volkswagen took a 19.89 per cent shareholding in Suzuki as part of the deal, but Suzuki alleges that it never received access to VW’s cor technology. Suzuki also claims there were differences between Suzuki and Volkswagen in the understanding of “independence.”
Suzuki says it has made requests to Volkswagen to agree to have amicable discussions to terminate the business and capital relationship, with no success. Now Suzuki says it wants to return to independent status and will pursue arbitration to recover its shares.
Suzuki’s Chairman and CEO Osamu Suzuki said today, “I am disappointed that we have to take this action but VW’s actions have left us no choice. They have continued to refuse our attempts on numerous occasions to resolve these issues through negotiation. I am more disappointed that having shaken the hand of Dr. Winterkorn [VW chairman] in agreeing to this partnership, he has not honoured his commitment to grant Suzuki access to what was originally agreed.
“In the absence of VW’s cooperation and given its failure to do what was agreed, there is no basis for the partnership to continue. With the cessation of the partnership there is also no basis for VW to hold on to Suzuki’s shares. We will now work to restore the relationship between Suzuki and VW to its original state as independent parties who do not restrict each other’s business. I call on Dr. Winterkorn to honour this.”