Toyota Takes Key Supplier Private In $33 Billion Deal

Toyota Motor will take Toyota Industries, a key supplier and forklift manufacturer, private in a $33 billion deal that could strengthen the founding Toyoda family’s control over the group, David Dolan, Adwitiya Srivastava, and Mariko Katsumura reported for Reuters.

Toyota Industries will benefit from “a longer-term business perspective." I Photo: Toyota Industries

The move comes as Japanese conglomerates face growing pressure to unwind cross-shareholdings under a government push for improved corporate governance.

Toyota Industries will benefit from “a longer-term business perspective,” the companies said.

“It streamlines the cross-shareholdings a bit within the group,” said Vincent Sun, senior analyst at Morningstar. He added that the deal positions Toyota Motor to benefit from future autonomous logistics technologies.

The transaction includes a $26 billion tender offer priced at 16,300 yen per share—well below Toyota Industries’ closing price of 18,400 yen prior to the announcement. The rest of the $33 billion package includes contributions from group affiliates.

Toyota Fudosan will invest 180 billion yen, chairman Akio Toyoda will invest 1 billion yen, and Toyota Motor will contribute 700 billion yen in non-voting preferred shares. A new holding company will be formed to complete the transaction.