Japan’s Nikkei newspaper reported that Toyota Industries is expected to accept a $42 billion takeover offer from Toyota Motor Corp., the world’s largest automaker, and other group companies as early as Tuesday.
The report added that group companies are expected to take Toyota Industries private after accepting the takeover offer. Toyota Motor announced in April that it was considering participating in a potential acquisition of Toyota Industries, a major parts supplier.
Kyodo News reported in May that Toyota Industries plans to accept a takeover offer from Toyota Motor Corp. and is making arrangements to announce its intention as early as the same month.
For information, Toyota owns 24% of Toyota Industries, while Toyota Industries owns 9.07% of Toyota and 5.41% of Denso, another major Toyota supplier. Toyota Industries has faced increasing pressure from shareholders to divest its cross-holdings, including shares in Aisin, another major Toyota supplier.
Going private will give Toyota Industries the freedom to focus on growth strategies without worrying about shareholder returns. Cross-holdings have come under increasing scrutiny from regulators and shareholders, as the practice can prevent management from having to serve shareholder interests.
Toyota Industries, formerly known as Toyoda Automatic Loom Company, was founded in 1926 by Sakichi Toyoda to manufacture automatic looms. An automotive division was established within the company, later spun off to become Toyota Motor Corporation.
Toyota Industries is a major manufacturer of forklifts and produces the RAV4 SUV for Toyota Motor Corporation, as well as engines.
