Toyota Motor revealed its intention to acquire Toyota Industries through a $33 billion private deal which will eliminate complicated shareholding relationships and enhance Toyoda family governance of the group.
The major acquisition enables Toyota Industries to pursue extended strategic plans according to official statements. The Japanese government has pushed conglomerates to eliminate cross-shareholdings because it seeks better corporate governance practices.
The acquisition process includes a $26 billion tender offer at 16,300 yen per share which falls below Toyota Industries’ previous market value of 18,400 yen. The remaining funds will come from a new holding company which will acquire shares from group firms and the Toyoda family members.
The Toyota Group companies Aisin, Denso and Toyota Tsusho will participate in the sale of Toyota Industries shares to acquire their current holdings from the company. The corporate restructuring will create a simplified structure for the group to evolve into a mobility-focused enterprise according to executive statements.
The company Toyota Industries established in 1926 as a loom manufacturer has maintained essential functions for Toyota’s logistics and manufacturing activities. The acquisition price of $42 billion exceeded market expectations although analysts predicted this move.
