(Bloomberg) – Toyota Motor Corp.
While investors attempted to cheer for $42 billion in investment – Toyota Industries’ stock is capped at 23% per day while Toyota Motor jumps as much as 5.6%, the potential move could also mark the retreat of Toyota Group in its attempt to abandon cross-sharing holdings and appoint more independent directors.
The chairman holds less than 1% of the Toyota industry, but the company owns 9.1% of the shares, which largely depends on how those shares are rationalized if the deal goes on.
Some analysts pointed out that further placing the Toyota industry under the control of automakers and Toyoda has been linked to the government’s demolition of comfortable business relationships to improve targeted responses to mergers and acquisitions, including from foreign entities.
“It is unclear whether this will be a trigger for further relaxation of Toyota Group’s cross-stakes, or rather, it is a trigger for maintaining cross-stakes,” said Masayuki Murata, general manager of Balanced Portfolio Investments. The portfolio investment general manager of Sumitomo Life Insurance Co. sumitomo Life Insurance Co., who privately privatized Toyota Industries “on this issue, they all rely on them, so they rely on them, so they rely on them.
An uncertainty about Toyoda’s acquisition plan reflects the crossroads in which Japanese corporate giants find themselves.
On the one hand, reforms have ushered in an unprecedented wave of foreign acquisitions and activity by radical investors, reviewing companies from SoftBank Group to Tokyo Gas Co., but domestic corporate giants also opposed losing control, including the acquisition and the acquisition of Taisho Pharmaceal Co., and the seventh family and one-seventh company and one-seventh company and one-seventh company and one-seventh company and one-seventh company and one-seventh company and one-seventh company and one-seventh company.
Toyota Industries will now join the operator of 7-Eleven convenience stores to show how far a test case the company reform will be. The founder family of Japanese retailers has made a high-profile acquisition attempt to defend against the takeover interest of Canadian rival Couche-Tard Inc. but failed to raise funds.
Funding is unlikely to be a problem for Akio Toyoda, according to the Bloomberg News, which reported that loans from Mitsubishi UFJ Financial Group Inc. and other large giant banks in Japan will supplement personal funds.
Nevertheless, the move may also be consistent with the Japanese government’s corporate reform, which includes reviewing relationships involving membership relationships that should not be listed in the first place by affiliates or units. The agreement will be based on changes Toyota has already taken to relax cross-equity and simplify its governance structure. Now, independent directors make up the majority of their board of directors.
“For the Toyota and Toyota industries, this is a mutually positive result,” said Kelvin Leung, portfolio manager at Robeco Hong Kong.
Toyoda’s acquisition plan comes as automakers attempt to rebuild their governance trust after a pair of subsidiaries, including Toyota Industries, discovered a series of regulatory scandals. In September, its share buyback program size rose by 1.2 trillion yen ($8.4 billion) due to strong demand in Japan, Europe and North America. The company said the plan was initially announced in May and will last until April 2025.
A month later in October, Toyota’s main supplier Denso Corp. said it plans to acquire its own shares of 40 billion yen. Soon after that, Toyota Industries announced that it would sell all 185 million shares in Denso, accounting for 5.9% of the company.
According to Kei Okamura, portfolio manager at Tokyo’s Neuberger Berman, the proposal could herald other efforts to consolidate the Toyota Group.
“There will be some other names within the scope of institutional investors,” he said. “This is not going to end here.”
– With the assistance of Alice French, Yokoyama Moka Mountain and hide and seek.
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