GM Corporation sells 57.7PC stake in Kenyan unit to Isuzu
Japanese carmaker Isuzu has taken over control of GM east Africa after the US based parent company relinquished its 57.7 percent controlling stake in the firm.
This will make Isuzu the majority shareholder in the firm in a deal first mooted in 2006.
The deal is still subject to regulatory approval.
Once the transaction is complete, the business will change its name to Isuzu East Africa.
GM currently sells Chevrolet and Isuzu products, and assembles Isuzu vehicles from its Nairobi plant.
The government owns a 20 percent stake in the company through the Industrial and Commercial Development Corporation (ICDC) while Centum holds 17.8 percent of the firm.
Japan’s Itochu Corporations holds the remaining 4.5 percent shareholding of the company.
The deal comes at a time Isuzu car sales have been rising given the popularity of its pick ups, trucks and buses.
According to GM Africa President and CEO Mario Spangenberg the decision to sell its stake in GMEA is born from the fact that 95 percent of its sales are Isuzu branded vehicles.
“We are responding to a request from Isuzu, which will enable it to be fully integrated into the company and apply more focus on its brand,” Mr Spangenberg said.
GM is expected to continue offering after sales and service support is provided to all Chevrolet customers.
GMEA Managing Director Rita Kavashe is expected to remain in office under the new ownership structure to ensure full integration of the business.
“We have planned for a smooth process, with all internal and external stakeholders ready to integrate Isuzu as a majority shareholder in the business. GM and Isuzu are working closely to ensure a timely transition,” Ms Kavashe said.
Isuzu Motor’s Executive Officer, Division Executive, International Sales Division Shinsuke Minami said the deal would have no impact on jobs.
Isuzu East Africa will continue to assemble and distribute Isuzu buses and light-, medium- and heavy-duty trucks, as well as the Isuzu D-Max pickup.
These vehicles will continue to be distributed via authorised dealers in Kenya, Uganda and Tanzania.