
Toyota Motor Corporation’s (NYSE:TM) Toyota Fudosan Co., Ltd. on Tuesday announced plans to initiate a tender offer for shares of Toyota Industries Corporation.
The company plans to take Toyota Industries private, with Toyota Fudosan investing around 180 billion Japanese yen ($1.26 billion).
The company said this move is part of a broader effort to accelerate the group’s transformation into a comprehensive “mobility company.”
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Also, Akio Toyoda, chairman of Toyota Motor Corporation, intends to contribute 1 billion yen (around $7.0 million), and Toyota Motor plans to invest approximately 700 billion yen ($4.9 billion) in non-voting preferred shares.
These investments are intended to be funded by reinvesting a portion of the proceeds from the sale of Toyota Industries shares, which were held by Toyota Fudosan, Akio Toyoda, and Toyota Motor since Toyota Industries’ initial listing.
The streamlining of the ownership structure, particularly around Toyota Industries, will allow the company to operate more agilely and focus on innovation in logistics and goods movement.
Toyota Industries is focusing on the development of autonomous technologies for logistics equipment such as forklifts, logistics management software, and environmentally friendly powertrains, and it will work on utilization of data related to the movement of goods, the company said.
The streamlining will be achieved by taking Toyota Industries private through a new holding company structure, funded by key Toyota entities and leadership, while also unwinding most of the existing cross-shareholdings involving Toyota Industries. Toyota Motor will retain a significant, but non-voting, stake.
As part of this strategic restructuring, Toyota Motor Corporation, AISIN Corporation, DENSO CORPORATION, and Toyota Tsusho Corporation will sell their existing shares in Toyota Industries.
Concurrently, these four companies will repurchase their own shares that are currently held by Toyota Industries; this will be accomplished through tender offers for their respective treasury shares.
This series of transactions is designed to dissolve the complex cross-shareholding relationships that exist between Toyota Industries and these four entities.
However, an exception will be made for Toyota Motor Corporation, which will retain an investment in Toyota Industries by holding non-voting preferred shares in the newly established holding company.
This move is part of an ongoing review of capital relationships within Toyota Group (since FY2023) to ensure continued growth and competitiveness. The aim is to find the optimum formation for Toyota Group as a mobility company.
Investors can gain exposure to the stock via Precidian ETFs Trust Toyota Motor Corporation ADRhedged (NYSE:TMH) and Avantis International Large Cap Value ETF (NYSE:AVIV).
Price Action: TM shares are trading higher by 0.06% to $189.25 premarket at last check Tuesday.
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