Mitsubishi Motors Corp. said Friday it will spin off its truck and bus business on the road to improving overall competitiveness, with DaimlerChrysler AG set to become the top shareholder in the new firm next spring.

Mitsubishi Fuso Truck and Bus Corp. will be established Jan. 6 and will initially operate as a wholly owned subsidiary of MMC, the Japanese automaker said.

In the spring, DaimlerChrysler, MMC’s largest shareholder, will acquire a 43 percent equity stake in MFTBC for 89 billion yen, and several Mitsubishi group companies will collectively purchase a 15 percent interest in the new entity for 31 billion yen. The remaining 42 percent will be held by MMC.

The direct tieup with German auto giant DaimlerChrysler, the world’s biggest truck maker, will enable MFTBC to consolidate its leading position in Japan’s truck and bus market and further enhance its overseas business, MMC said.

“We expect to see our alliance with DaimlerChrysler in trucks and buses gain further momentum,” MMC President and Chief Executive Officer Rolf Eckrodt said in a statement. “We will reap the benefits of economies of scale and additionally be able to tap into DaimlerChrysler’s wealth of knowledge and technology more directly.”

Standard & Poor’s Corp. said MMC’s spinoff plan “will have no immediate impact on the BB-pi rating on the company.”

Through the transaction, MMC expects to reduce its debt by 330 billion yen by transferring 210 billion yen in debt to MFTBC and through cash flow of 120 billion yen from the sale of MFTBC shares, the major U.S. credit-rating agency said.

Stronger ties between MMC and DaimlerChrysler also support the rating on MMC.

Still, given the size of its ownership and the difficult environment in the commercial vehicle market in Japan, the risk that MMC may have to extend financial support to MFTBC cannot be ruled out, S&P said.

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