Toyota Motor Chairman Akio Toyoda has put forward a proposal to acquire supplier Toyota Industries in a potential deal worth 6 trillion yen ($42 billion). If finalized, the acquisition would be a landmark buyout for Japan Inc., reshaping one of the country’s most powerful corporate groups.
Toyota Industries, which manufactures parts for Toyota, has set up a special committee to review the proposal and has enlisted advisers to evaluate the offer, Bloomberg reported, citing sources familiar with the matter.
Should the deal go ahead, it would grant Toyoda, the grandson of the company’s founder, full control of Toyota Industries, a company with deep historical significance within the broader Toyota group. Originally founded as a manufacturer of textile looms, Toyota Industries played a pivotal role in the development of Toyota Motor into the world’s top-selling automaker.
Today, Toyota Industries continues to produce textile machinery, car engines, electronics, and stamping dies. The company’s symbolic importance to the Toyota group is notable, making the potential buyout a significant move.
Toyota Motor and Toyota Industries have not yet commented on the proposal outside of regular working hours.
According to Bloomberg, the proposed 6 trillion yen offer represents a 40% premium over Toyota Industries’ market value as of Friday’s close. If the deal moves forward, it will be funded by Toyoda’s personal investments, supplemented by loans from Japan’s major banks.
Japan has seen a rise in management buyouts and corporate acquisitions in recent years, fueled by expectations of improved corporate governance and better returns for shareholders, as well as optimism about the country’s economic recovery after years of stagnation and deflation. However, not all acquisitions have been successful, as seen with retailer Seven & i Holdings, which abandoned a $58 billion management buyout offer in February due to difficulties in securing financing. Seven & i owns the 7-Eleven convenience store chain, and its failed deal has since attracted attention from Canadian rival Alimentation Couche-Tard, which is now bidding for the company.
