Bloomberg News

Bosch Sells Out of Japan’s Denso After Almost Six Decades

November 08, 2012

Bosch Sells Denso Stake for 1.1 Billion Euros for Investments

Bosch Cp4 diesel pumps move along the production line at the Robert Bosch GmbH headquarters in Stuttgart, Germany. Photographer: Simon Dawson/Bloomberg

Robert Bosch GmbH, the world’s biggest maker of auto parts, sold its entire stake in Japan’s Denso Corp. (6902) for 1.1 billion euros ($1.4 billion), ending an investment that started almost 60 years ago.

While the deal ends the equity ties, the two companies will continue to collaborate, Kariya, Japan-based Denso said in a statement today. Bosch sold the 46 million shares, equivalent to a 5.4 percent stake, to fund investments with a “promising future” and acquisitions, it said.

“It was a non-strategic shareholding for us,” Gerlingen, Germany-based spokesman Rene Ziegler said by telephone. “We are trying to diversify and are investing and making acquisitions in all segments.”

Bosch, which gets most of its revenue from the automotive business, is seeking to diversify in industries ranging from packaging technology to health care. Since the two companies signed their first license agreement in 1953, the Japanese partner has turned into a competitor as the rise of Toyota Motor Corp. (7203) and Honda Motor Co. (7267) helped Denso grow into the world’s second-biggest auto-parts maker.

“If you’re the world’s largest car parts supplier, is any partnership really strategic?” Erich Hauser, a London-based analyst at Credit Suisse Group AG, said by telephone. “Given the size of the operation, I’m sure Bosch is a strategic partner to many people, but I’m not sure anyone can be a strategic partner to Bosch.”

Looming Decision

Bosch will make a decision on a solution for its unprofitable solar unit by the end of the year, spokesman Christian Hoenicke said Nov. 1, without specifying the options.

Bosch has also been evaluating how to become more autonomous in its electric car battery operations, seeking greater independence from its joint venture with Samsung SDI Co. (006400), SD Limotive.

Closely held Bosch appointed Volkmar Denner, who has been at the company for 26 years, as chief executive officer in July. The former head of the automotive electronics division replaced Franz Fehrenbach, who became chairman of the supervisory board.

Denso fell 1.4 percent to close at 2,425 yen in Tokyo before the share-sale announcement, cutting the stock’s gain this year to 14 percent.

The company last month cut its profit forecast 20 percent as a territorial dispute prompted Chinese consumers to shun from buying Japanes automobiles.

To contact the reporters on this story: Ma Jie in Tokyo at jma124@bloomberg.net; Alex Webb in Frankfurt at awebb25@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net


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