Toyota Eyes $42 Billion Buyout of Key Supplier Toyota Industries

Published 17 hours agoTM

Toyota Eyes $42 Billion Buyout of Key Supplier Toyota Industries

Toyota Motor Corp. is exploring a major acquisition of its key supplier, Toyota Industries, in a deal proposed by Toyota Chairman Akio Toyoda and the founding family. This buyout, valued at 6 trillion yen ($42 billion), is significant due to Toyota's existing 24% stake in Toyota Industries, which also holds investments in Toyota and other key suppliers like Denso. According to Reuters, this move is aimed at simplifying the complex cross-shareholdings within the Toyota group.

Currently, Toyota Industries has publicly stated it has not received any buyout proposal from Toyota's chairman or group, although the company has shown an interest in going private. Despite these claims, the financial implications of such a buyout could realign interests within the large corporate structure of Toyota, which is well-known for its interconnected equity holdings.

This potential acquisition is viewed as a strategic move by Toyota Motor Corp. to enhance its governance by reducing the intricate web of cross-holdings. Additionally, it could provide Toyota Industries with the flexibility to focus on long-term business growth without the constraints of short-term public market expectations. Such a shift could strengthen its position and operational efficiency in the competitive automotive industry.

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