Toyota Motor will take forklift-maker Toyota Industries private in a $33 billion deal, the companies said on Tuesday, marking a significant step in unwinding cross-shareholdings that will likely enhance the influence of the group’s founding Toyoda family.
The companies said going private would allow Toyota Industries to take a longer-term business perspective, as Japanese conglomerates face increasing pressure to unwind mutual stakes under a government drive for better corporate governance.
The total acquisition cost for the Toyota Group will be about 4.7 trillion yen, including a $26 billion tender offer for Toyota Industries shares at 16,300 yen each, well below the closing price of 18,400 yen before the deal was announced. A new holding company will be established to carry out the transaction.
Toyota Fudosan, the group’s real estate arm, will invest 180 billion yen, Toyota Motor Chairman Akio Toyoda will contribute 1 billion yen, and Toyota Motor itself will invest 700 billion yen in non-voting preferred shares.
Toyota Motor and its group firms Aisin, Denso and Toyota Tsusho will sell their shares in Toyota Industries and acquire shares of their own stock currently held by Toyota Industries. The companies said the move aligns with Toyota Group’s broader transformation into a mobility company focused on the movement of people, goods, information, and energy.
Toyota Industries, they added, would concentrate on the transport of goods.
The deal had been anticipated, though the tender price surprised some observers. Previous media reports suggested a $42 billion bid, representing a 62% premium over the offer that was ultimately made. Toyota had said in April that it was considering joining a potential buyout of Toyota Industries.
As of September last year, Toyota Motor owned roughly 24% of Toyota Industries, which in turn held about 9% of Toyota Motor and over 5% of Denso.
Founded in 1926 by Sakichi Toyoda to manufacture automatic looms, Toyota Industries, formerly Toyoda Automatic Loom Works, later launched an automotive division that eventually spun off into what is now Toyota Motor.
