With the newly forged Fuso-Hino joint venture company, Archion only just having come into existence, the news this week that German based global giant Daimler has just announced that it has reduced its stake in the Japanese joint venture down to just 25per cent came as somewhat of a shock.
The sell down by Daimler is said to have generated cash proceeds of around $AUD 1 billion ($AUD973 million or $US695million), a contribution not to be sneezed at in these uncertain and fraught times on the global stage.
The German-based global truck and bus giant said that the sale, which was through a secondary offering of shares, brings its ownership stake down to the same level as partner Toyota Motor, perhaps answering some speculation about the German corporations ‘upper hand’ in the joint venture, which has seen the majority of senior executives int he new operation being drawn from Daimler.
Originally Daimler Truck and Toyota announced their plans to merge their Japanese truck units last year, which was announced as a move designed to increase efficiencies in development, procurement and production while boosting competitiveness.
Daimler’s Fuso Truck and Bus and Toyota’s Hino were brought together into the new holding company know as Archion, with shares in the new operation listed on the Tokyo Stock Exchange earlier this year.
Daimler and Toyota had both announced plans to each hold a 25 per cent ownership stake in Archion.
“The secondary offering generated cash proceeds of approximately 600 million euros, increased Archion’s free float and completed its successful transition to an independently listed company,” said Daimler Truck chief financial officer Eva Scherer.
“We remain a committed shareholder and continue to support Archion going forward,” Scherer said.
The sales was referred to as a “Greenshoe” sale, saw Daimler dispose of just over 59 million shares in Archion. Reports are that Daimler and Toyota agreed to hit a more even balance in the company after last year’s merger, with the voting rights split unevenly at 26 per cent to Toyota’s 19.9 per cent.
The reduction sale came through two off-market transaction, with Daimler initially selling around 394 million shares back on 22 July following that up on 14 August with the second tranche of 59 million shares, after Daimler had lent the shares to SMBC Nikko Securities under an agreement tied to an earlier over-allotment offering, which had run from 29 July 29 to 19 August.
The filing also laid out governance terms attached to the deal, with Daimler retaining the right to nominate one audit-committee director on Archion, for as long as it holds 10 per cent or more of the voting rights.
In addition a Daimler-nominated director already sits on the board, with both parent companies barred from selling shares in Archion for five years after the integration took effect without mutual agreement.
Until the free-float adjustment trade is complete, Daimler has also agreed not to exercise voting rights beyond a bare majority at shareholder meetings without Toyota’s prior consent.
