Ford sells 20% stake in Mazda for $538 million; keeps 13%

LOS ANGELES -- Cash-needy Ford Motor f is selling about two-thirds of its 33.4% controlling stake in Mazda Motor for about $538 million.

Ford will keep about 13%, while Mazda will buy about 6.9% of its shares from Ford for up to $185 million, it said. About 20 Mazda partners will buy 13%. Mazda is not disclosing the names, but the group was carefully assembled, said Keiichi Wakabayashi, general manager of corporate communication of Mazda, parent of Mazda USA. "The move was discussed deeply within Mazda."

Slow sales and the global financial crisis have sent shares of Ford plunging and led to a worse-than-expected $2.98 billion operating loss in the latest quarter.

Ford first invested in Mazda in 1979 and since taking control in 1996 has restored its financial health and brand image. They now share vehicle platforms, powerplants and engineering.

For example, the 3.7-liter V-6 in the CX-9 is a Ford engine, which Mazda could not have developed on its own for limited volume. Meanwhile, the four-cylinder engine used in the Ford Fusion is a Mazda design, and the Fusion and Mazda6 have shared an evolving vehicle platform.

The companies also jointly own assembly plants in the United States, Thailand and China.

While Mazda regains control, the cooperation will continue, Wakabayashi said. "We need Ford, but we get some independence and still have an alliance with Ford. As of now, we haven't changed any strategy with Ford. We will continue the joint venture and the sharing."

Mazda Executive Vice President Takashi Yamanouchi will become CEO today. Current CEO Hisakazu Imaki, the first Japanese chief after four Ford executives since 1996, will be chairman.

Ford CEO Alan Mulally said in a statement that the deal "allows Ford to raise capital that will help fund our product-led transformation, and at the same time, allows Ford and Mazda to continue our successful strategic relationship,"

Earlier this year, Ford sold the premium Jaguar and Land Rover brands to India's Tata Motors.

Also on Tuesday, GM sold its remaining 3% stake in Suzuki Motor for $232 million.