Toyota launches $26bn bid to privatise key group unit

Toyota will acquire a group supplier in a $26 billion deal, marking a significant move for Japan’s leading corporation and highlighting the ongoing influence of the Toyoda family.

An undisclosed real estate firm led by Toyota Chairman Akio Toyoda is set to make a 3.7 trillion yen ($26 billion) bid to acquire Toyota Industries, a manufacturer of forklifts, engines, batteries, and converters, and delist it from the stock market.

While the deal was anticipated, the price may be surprising. Toyota Fudosan, the real estate firm, is offering 16,300 yen per share, which is lower than the stock’s most recent closing price of 18,400 yen.

Earlier reports suggested the deal could be around $42 billion, representing a 62 per cent premium compared to the current offer price.

In recent years, Japanese firms have faced increasing scrutiny from market regulators and investors regarding their cross-shareholdings in affiliates and business partners. This has led to a rise in both management buyouts and acquisitions.

Many of the transactions have been motivated by the anticipation that an improvement in corporate governance will lead to increased returns for shareholders.

In April, Toyota announced its contemplation of joining a possible acquisition of Toyota Industries, a decision that insiders believe would enhance the group’s corporate governance.

Attribution: Reuters
Subediting: M. S. Salama