(Bloomberg) – President of Toyota Motor Corp. Akio Toyoda suggested buying Toyota Industries Corp., people familiar with the question said, striving to consolidate its grip on the largest business empire in Japan as a wave of merge and acquisition activities, turning the country.
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The proposal is evaluated by the Toyota Industries, which is making stanks for the production of textiles, as well as parts for Toyota cars, at 6 trillion ¥ ($ 42 billion), said one of the people, approximately 40% premium over its market capitalization on Middle Friday.
Toyota Industries, the company, founded by Toyoda Sakichi’s great -grandfather, which ultimately gave birth to the world carmaker №1, formed a special committee after receiving the proposal and hiring councilors to review its viability, people said, wanting not to be identified as the information is not public.
Although Akio is the chairman of Toyota Motor, its direct ownership of the company is less than 1%, while Toyota Industries has a 9.1% share in the car manufacturer. Buying will enhance Akio’s retention and influence on the wider group Toyota, which includes suppliers and bets in other businesses, including rival car manufacturers.
The deal would qualify among the largest redemptions of records worldwide. The discussions still continue and the deal may not continue in its current form or at all.
In a statement, Toyota Motor said he was considering various opportunities, including a partial investment in Toyota Industries, but nothing was resolved. Toyota Industries said in an email statement that he was considering all opportunities, including capital policies, to improve the corporate value of the group, but no decisions were made.
Seven and I precedent
The proposal to buy Toyota Industries comes months after the collapse of such an offer to take the Japanese retailer Seven & I Holdings Co. Private.
Leaded by her founding ITO family, the failure of this plan due to lack of funding has caused the chances of absorbing the Canadian competitor of the COUCHE-TARD INC. The liberalization of capital flows in the country, together with the impetus for greater management and accountability of shareholders, disputes the long-standing links between management and stakeholders who emphasize stability.
“While in the last two years we have seen the unleashing of the cross alleys in the Toyota group, we have focused on the Toyota Industries as the” final boss “of corporate government reforms,” says Masahiro Akita, based on Tokyo’s Bernstein, to the Beeza, react The market focus on corporate governance should cause the structure of the list of parental subsidia, including Toyota and Toyota Industries. “
If Toyota Industries gain, funding will consist of personal investment from Akio Toyoda, along with loans from Mitsubishi UFJ Financial Group Inc. And other megabans in Japan, one of the people said.
Akio, 68, gave way aside as CEO of Toyota Motor in 2023, after managing the family business for 14 years, handing over the work of the then Chef Lexus Koji Sato. However, the grandson of the car manufacturer’s founder has an impact on the impact on the company.
Squeezing support
However, in recent years, the support of Toyota Motor’s shareholders for Toyoda has declined. More than a quarter of the votes filed opposed to its reassignment, partly over the work of the company for certificates for the safety of vehicles. Its share of affirmative votes dropped to 72%, from 85% and 96% in the previous two years.
For all this resistance, the insistence of Toyoda that Toyota remains a course with a “multi-way” strategy, which leaves room for gas-electric hybrid power engines, pay off. The company has expanded its lead, as the world’s best-selling car is slowing, as the wider transition of the industry to a completely electric vehicles is slowing down. At 42.5 trillion Toyota is the second most valuable car company in the world after Tesla Inc.
It is unclear whether the successful purchase of Toyota Industries will change the participation of Toyoda on the car manufacturer’s board. Although now smaller and lower than the car giant, Toyota Industries has an illuminated position in the erudition of the Toyoda family.
Its history is back 135 years when Sakichi improved in Stan’s projects for textile production, which at that time was an important export to Japan. His son Kiichiro founded Toyota Motor in 1937.
The two companies are still deeply intertwined. Toyota Motor and its branches hold about 38% of the shares in Toyota Industries, while Toyota Fudosan Co., the real estate company, which counts Akio as its chairman, owns 5%.
-with the help of Alastair Gale and Santosh Nair.
(Updates with a Toyota Motor statement in sixth paragraph)
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