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Japan’s Yamaha Corp to cut stake in Yamaha Motor

May 22, 2007
Filed under Features

Maker of musical instruments Yamaha Corp. will cut its stake in Yamaha Motor Co. Ltd to 14.9 percent from 22.7 percent to reduce the influence of the powersport manufacturer’s earnings on its own earnings, the two companies said.

They said Yamaha Corp. would remain the largest shareholder in Yamaha Motor, but Yamaha Motor would no longer be an equity-method affiliate — a status it has at present because Yamaha Corp has a stake of at least 20 percent and includes Yamaha Motor’s net earnings in its own non-operating earnings.

Among the buyers of the Yamaha Motor shares that Yamaha Corp plans to unload is trading house Mitsui & Co. Ltd, which will purchase a stake of 3 percent for a yet-to-be agreed price and rank as the motorcycle maker’s seventh largest shareholder. This is intended to reinforce the ties between Mitsui & Co. and Yamaha Motor in the distribution abroad of Yamaha Motor motorcycles and to facilitate collaboration in other areas business.

The rest of shares Yamaha Corp plans to sell will go to unidentified institutional investors through block trades brokered by securities firms.

To enhance the value of the Yamaha brand, Yamaha Motor will buy a stake of up to 5 percent in Yamaha Corp., part of it in the open market, by next March.

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