Get ready for more divesting of foreign assets by General Motors (ticker: GM). Bloomberg has reported that GM will sell 40% of its Australian truck division to Isuzu. On top of that Isuzu is also considering taking a stake in GM's South African division, according to the Nihon Keizai Shimbun.
This purchase by Isuzu is said to fit company President Yoshinori Ida's strategy of moving production overseas in order to further cut costs and buffer earnings from currency exchange volatility. The Bloomberg article highlighted Isuzu's aggressive investment in China. And it stated that Isuzu sells 75% of its autos overseas.
An analyst from Nomura Securities, a subsidiary of Nomura Holdings (ticker: NMR) reacted positively to the news and commented that domestic track sales in Japan have become flat.
GM will retain control of its 7.9% stake in Isuzu Japan, at least for the time being .
For more information click on the link above to the Bloomberg article.
Isuzu's (Tokyo Stock Exchange ticker: 7202) shares have gained on the news. It does have an ADR, ticker: ISUZF.PK, however its shares are extremely thinly traded.