Daimler to buy Asia truck makers

Daimler hopes Mitsubishi will give it a hold on the global market

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TOKYO, Japan -- DaimlerChrysler plans to spend 1.2 billion euros ($1.2 billion) on stakes in the truck businesses of Mitsubishi Motors and Hyundai Motor.

The move is part of Daimler's strategy to boost its presence in the Asian truck market and save money on engine production -- a costly business, according to analysts.

Daimler, the world's biggest truck maker, said on Friday it would take a 43 percent stake worth 760 million euros in the Fuso truck unit owned by Mitsubishi Motors, Japan's fourth-largest vehicle maker.

The German company also announced plans to exercise an option to buy 50 percent of South Korea's Hyundai Motor's truck business by the end of the year for 400 million euros. Under the deal, Mitsubishi will split the Fuso division off into a separate company.

Daimler already owns 37 percent of Mitsubishi, which will hold a 42 percent stake in Fuso after the deal is concluded, and holds a minority stake in Hyundai.

Daimler and Mitsubishi hope to trim development costs and expect to see their first jointly-produced truck in the Japanese market by 2005. Mitsubishi's plant in Kawasaki, west of Tokyo, will produce about 10,000 of the four-ton mid-size trucks annually.

Asia accounts for nearly half of all global commercial vehicles sales, but DaimlerChrysler has so far relied on its Mitsubishi partnership for truck sales in the region. Splitting off the truck division would give DaimlerChrysler stronger control of the best part of Mitsubishi.

But some analysts say investors in Mitsubishi could lose out because the division is widely considered the jewel in its crown despite being battered by a decade-long slump in Japanese domestic truck demand.

Mitsubishi's stock fell 3.6 percent to close on Thursday at 266 yen in Tokyo, which compares with a year high of 444 in early April and a low of 216 in mid-January.

DaimlerChrysler's stock was little changed at 37.45 euros in Frankfurt trading early on Friday.

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