Toyota industries shares plunge as group plans $33 billion take-private deal
Shreeaa Rathi | Jun 04, 2025, 22:42 IST
( Image credit : BCCL - Non Copyright, TOIGLOBAL )
In a surprising turn of events, shares of Toyota Industries plummeted following the announcement of Toyota Group's ambitious plan to privatize the company, a deal estimated at a massive 4.7 trillion yen. Investors were left disheartened as the tender offer fell short of expectations.
Toyota Industries' shares experienced a significant drop on Wednesday following the announcement of Toyota Group's plan to take the company private in a deal valued at 4.7 trillion yen ($33 billion). The deal includes a tender offer of $26 billion for shares of Toyota Industries at 16,300 yen apiece, according to Reuters, sharply lower than Tuesday's close of 18,400 yen, signaling investor disappointment. This move occurs amidst increasing pressure on Japanese firms to reduce cross-shareholding ties, a practice Toyota employed in 2005 to shield itself from acquisition threats. The proposed transaction involves creating a new holding company with investments from various Toyota entities and external financing.
Shares of Toyota Industries slumped as much as 13% Wednesday.
The tender offer price of 16,300 yen per share is lower than the closing price of 18,400 yen on Tuesday.
Toyota Group will establish a new holding company for the deal. Toyota Fudosan will invest approximately 180 billion yen, and Toyota Motor Chairman Akio Toyoda will invest 1 billion yen. Toyota Motor will invest about 700 billion yen in non-voting preferred shares. Loans from Sumitomo Mitsui Banking Corporation, MUFG Bank, and Mizuho Bank will back other financing.
Japan's Financial Services Agency has been advocating for a decrease in cross-shareholding arrangements.
Satoru Aoyama, head of corporate ratings at Fitch Ratings in Japan, stated that Toyota used cross-shareholding back in 2005 to protect itself against acquisition threats.
Kei Okamura, managing director and Japanese equities portfolio manager at Neuberger Berman, anticipates more unwinding of cross shareholdings within the Toyota Group.
Stock chart icon Stock chart icon Toyota shares tanked Wednesday.
Arun George, a global equity research analyst, suggested that the offer is "unattractive."
"The special committee requested three times that the offeror improve its JPY16,300 final offer, but was rebuffed," said George.
George noted that the offer price was below the midpoint of the valuation range provided by independent financial advisers.
In April, Toyota disclosed it was considering investing in a potential $42 billion buyout of Toyota Industries.
Toyota Motor, which was spun off from Toyota Industries in 1937, indicated in a regulatory filing that it was "exploring various possibilities, including partial investment" in Toyota Industries.
Okamura views the deal as a positive development for Toyota Group.
"Going forward, there will be more of these unwinding of cross shareholdings amongst the Toyota Group," said Kei Okamura, managing director and Japanese equities portfolio manager at Neuberger Berman.
"Over the mid- to long-term, if these shareholdings are going to be unwound and if the proceeds are going to be used for growth investments, it bodes well for capital returns."
Toyota Industries produces a range of products, including forklifts, engines, electronic components, and stamping dies.
The global automobile industry is currently facing tariff headwinds. In April, U.S. President Donald Trump announced 25% duties on automobile imports. Analysts had predicted that Toyota Motor would be the most affected due to its significant exposure to the U.S. market.
Shares of Toyota Industries slumped as much as 13% Wednesday.
The tender offer price of 16,300 yen per share is lower than the closing price of 18,400 yen on Tuesday.
Toyota Group will establish a new holding company for the deal. Toyota Fudosan will invest approximately 180 billion yen, and Toyota Motor Chairman Akio Toyoda will invest 1 billion yen. Toyota Motor will invest about 700 billion yen in non-voting preferred shares. Loans from Sumitomo Mitsui Banking Corporation, MUFG Bank, and Mizuho Bank will back other financing.
Japan's Financial Services Agency has been advocating for a decrease in cross-shareholding arrangements.
Satoru Aoyama, head of corporate ratings at Fitch Ratings in Japan, stated that Toyota used cross-shareholding back in 2005 to protect itself against acquisition threats.
Kei Okamura, managing director and Japanese equities portfolio manager at Neuberger Berman, anticipates more unwinding of cross shareholdings within the Toyota Group.
Stock chart icon Stock chart icon Toyota shares tanked Wednesday.
Arun George, a global equity research analyst, suggested that the offer is "unattractive."
"The special committee requested three times that the offeror improve its JPY16,300 final offer, but was rebuffed," said George.
George noted that the offer price was below the midpoint of the valuation range provided by independent financial advisers.
In April, Toyota disclosed it was considering investing in a potential $42 billion buyout of Toyota Industries.
Toyota Motor, which was spun off from Toyota Industries in 1937, indicated in a regulatory filing that it was "exploring various possibilities, including partial investment" in Toyota Industries.
Okamura views the deal as a positive development for Toyota Group.
"Going forward, there will be more of these unwinding of cross shareholdings amongst the Toyota Group," said Kei Okamura, managing director and Japanese equities portfolio manager at Neuberger Berman.
"Over the mid- to long-term, if these shareholdings are going to be unwound and if the proceeds are going to be used for growth investments, it bodes well for capital returns."
Toyota Industries produces a range of products, including forklifts, engines, electronic components, and stamping dies.
The global automobile industry is currently facing tariff headwinds. In April, U.S. President Donald Trump announced 25% duties on automobile imports. Analysts had predicted that Toyota Motor would be the most affected due to its significant exposure to the U.S. market.