The board of directors of Toyota Industries Corporation said it has received a $33 billion offer to take the company private, Bloomberg reported on June 3.
The deal, which will involve a tender offer for shares of the conglomerate for ¥16,300 a share — 11 per cent, below Toyota Industries’ closing price on June 3; could solidify the founding family’s grip over Japan’s biggest business empire, it added.
Sources told the publication that the parties concerned have picked financial advisers and are working toward a tender offer as soon as November this year.
Shares in Toyota Industries rose less than 1 per cent in trading in Tokyo on June 3. The stock has risen over 40 per cent since reports of the buyout were first broken by Bloomberg.
What issues does the deal resolve? Why is it significant?
If it goes through, this would be among the biggest buyouts on record anywhere in the world.
Notably, it resolves a long criticised “parent-child” structure between the companies. “This will dissolve the cross-shareholding between Toyota Industries and those four companies, except Toyota Motor will continue to invest in Toyota Industries in the form of preferred shares mentioned above,” the statement noted.
The measures also falls in line with Japanese government’s efforts to encourage big companies to unwind cross-held shares with subsidiaries and other businesses. Sources told Bloomberg that a special board committee, created to evaluate the proposal as per government guidelines, is evaluating the buyout proposal by a special purpose vehicle established by Toyoda.
Importantly, the takeover may give Akio Toyoda greater influence over the carmaker founded by his grandfather Kiichiro Toyoda. Toyota Motor is today among the biggest carmakers in the world with annual production of more than 11 million vehicles.
Toyota Industries was founded by Toyoda’s great-grandfather Sakichi. It today supplies textile looms, forklifts and parts for Toyota’s cars.
(With inputs from Bloomberg)