Toyota Eyes Major Shakeup With $42 Billion Offer For Toyota Industries

Toyota Motor Corp‘s TM chair, Akio Toyoda, has proposed a buyout of Toyota Industries Corp.

The proposal values Toyota Industries at 6 trillion yen ($42 billion), marking a 40% premium over its market capitalization at the close Friday, Bloomberg reported, citing unnamed sources familiar with the matter. Toyota Motors stock gained on Monday amid the report.

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Toyota Industries confirmed to Reuters that it had received proposals about going private through a special purpose company but denied receiving a buyout offer from the Toyota chairman.

Akio’s great-grandfather, Sakichi Toyoda, founded Toyota Industries, formerly Toyoda Automatic Loom Works, in 1926 to manufacture automatic looms. The company created an automotive division, which later spun off as Toyota Motor.

In addition to forklifts, Toyota Industries manufactures the RAV4 sport utility vehicle for Toyota.

Akio’s direct ownership of Toyota Motor stands at less than 1%.

Toyota owned about 24% of Toyota Industries as of September 2024, while Toyota Industries held just over 9% of the Japanese automaker.

The buyout report coincided with increased scrutiny of Japanese companies over their long-term cross-shareholdings in affiliates and business partners.

If the Toyota Industries deal materializes, financing will consist of personal investments by Akio Toyoda and loans from Mitsubishi UFJ Financial Group Inc.

Akio, 68, stepped down as Toyota Motor’s chief in 2023 after leading the family business for 14 years, handing the job to then-Lexus chief Koji Sato.

Toyota Motor’s stock tanked over 175 in the last 12 months.

According to JPMorgan’s Akira Kishimoto, Japanese automakers could face a potential hit of 4.46 trillion yen (about $29.44 billion). Given its resilience and strong fundamentals, Toyota remains JPMorgan’s top pick.

Price Action: TM stock is up 3.61% at $195.00 premarket at last check Monday.

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