New Delhi, Dec 9 (IANS) German auto giant Volkswagen Wednesday picked up a 20 percent stake in Suzuki Motor for about $2.5 billion, while the Japanese auto maker will reciprocate by taking up equity worth half of the proceeds in the European firm.
“Both parties are focused on achieving synergies in the areas of rapidly growing emerging markets as well as in the development and manufacturing of innovative and environmentally friendly compact cars,” Volkswagen chief executive Martin Winterkorn said in a release.

Suzuki in a statement said the company hoped to benefit from the tie-up in terms of developing new energy efficient and environment friendly cars and the Volkswagen offer was accepted to compensate for weaknesses in the Japanese company’s portfolio.

“Suzuki believes there are many lessons to be learned from Volkswagen regarding their method in developing business strategy,” the Suzuki statement said.

The partnership will enable both companies to collaborate in all fields such as product development and manufacturing and sales.

Suzuki will use about $1.1 billion to repay debt and “improve financial position”, the company said.

Maruti Suzuki’s scrip shot up 3.82 percent at the Bombay Stock Exchange Wednesday after the global auto giants announced the share swapping deal.

The scrip, which opened at Rs.1,565, shot up to Rs.1,629 around noon. It later on settled to a lower level and was ruling at Rs.1,595.75, up 1.7 percent, some 30 minutes before the closing bell.

Suzuki owns a 54.21 percent stake in Maruti Suzuki.