Daimler sells its stake in Tata Motors

German carmaker Daimler (NYSE:DAI) has sold off its 5.34 percent stake, or 25.59 million shares, in Indian automaker Tata Motors for Rs 1,861 ($408.1 million) through a series of block deals, according to The Times of India today.

The move ends a more than 50-year association between the companies.

The stake was acquired by investors including Tata Sons and Citigroup’s Mauritius investment arm, among others.

Tata’s (BOM:500570) stock closed today at Rs 771, down more than 3 percent on the Bombay Stock Exchange. Parent company the Tata Group reportedly holds about a 25.5 percent stake in Mumbai-based Tata Motors (NYSE:TTM), following this transaction.

Tata is developing fuel efficient, low emissions vehicles including an electric version of the Nano, which is being billed as the world’s cheapest, smallest car (see Tata Nano coming to the U.S. in three years?).

Tata intends to sell an electric version of its Indica hatchback in Norway and India in 2010 (see India's Tata Motors reveals electric car prototype). The company is also experimenting with compressed-air powered vehicles (see India's Tata funds air-power car).

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