Toyota Industries (TSE: 6201) fell as much as 12.5% during Asian trade on Wednesday, following news of a proposed JP¥4.7 trillion (A$50.5 billion) buyout by Toyota Group (TSE: 7203) to take the company private.
The sell-off reflects investor disappointment with the deal’s pricing. According to Reuters, the offer includes a tender offer of ¥16,300 per share, well below Tuesday’s closing price of ¥18,400.
The landmark transaction, announced Tuesday, marks a major step in unwinding long-standing cross-shareholdings within the Toyota Group and is expected to bolster the Toyoda family's control.
The companies said that going private would allow Toyota Industries to “deepen collaboration within Toyota Group” and “lead the way in the mobility sector”.
Under the terms of the deal, a new holding company will be established. Toyota Motor will invest ¥700 billion in non-voting preferred shares, while the group's real estate arm Toyota Fudosan will invest ¥180 billion. Toyota Motor Chairman Akio Toyoda will personally contribute ¥1 billion.
As part of the broader restructuring, Toyota Motor, along with group affiliates Aisin, Denso, and Toyota Tsusho, will sell their shares in Toyota Industries and in return, repurchase their own shares held by Toyota Industries via coordinated tender offers.
The statement also highlighted Toyota Industries’ strategic pivot, noting the company is "focusing on the movement of people, goods, information, and energy as it progresses towards transforming into a mobility company".
Initiatives include the "development of autonomous technologies for logistics equipment such as forklifts, logistics management software, and environmentally friendly powertrains", along with the expanded use of data for logistics optimisation.
As of September 2024, Toyota Motor owned roughly 24% of Toyota Industries, while Toyota Industries held about 9% of Toyota Motor and over 5% of Denso.
The deal is expected to significantly simplify the group’s ownership structure amid growing regulatory pressure in Japan for improved corporate governance.
