Ford abandons Mazda control with 20 percent stake sale

By Chang-Ran Kim, Asia autos correspondent

TOKYO (Reuters) - Ford Motor Co (F.N: Quote), scrambling for cash as the U.S.-based automakers struggle to stay alive, has agreed to sell about two-thirds of its stake in Japanese carmaker Mazda Motor Corp (7261.T: Quote) for around $538 million.

Ford, first took a stake in Mazda in 1979 and raised it to a controlling interest of 33.4 percent in 1996. It will remain Mazda's top shareholder at 13 percent after selling the shares to Mazda and to some Mazda business partners.

Mazda plans to buy back 6.87 percent of its own shares from Ford for up to 17.9 billion yen ($185 million), keeping them as treasury stock, it said. More than 20 undisclosed Mazda business partners will buy the remaining shares Ford is selling, Mazda said.

Reeling from slowing sales, Detroit's General Motors Corp (GM.N: Quote), Ford and Cerberus Capital Management LP's CBS.UL Chrysler LLC are desperately trying to raise cash to come through the worst economic crisis since the Great Depression. Executives from all three are expected to amplify their calls for a financial lifeline from the U.S. government at Congressional hearings beginning Tuesday.

Ford shares dipped to a 26-year low of $1.70 on Tuesday ahead of the Congressional testimony before recovering to $1.73, up 1 cent or 0.6 percent.

As part of the ownership change, Mazda said two board members -- Chief Financial Officer David Friedman and sales and marketing chief Daniel Morris -- will return to Ford. Executive Vice President Philip Spender will remain.

Mazda Chief Executive Hisakazu Imaki -- the first Japanese CEO after a string of four Ford executives at the helm since 1996 -- will cede his post to another executive vice president, Takashi Yamanouchi, to become chairman of the board.

All personnel changes will take effect on Wednesday.