Toyota is reportedly planning a substantial unwinding of strategic shareholdings, involving banks and insurance firms selling approximately $19 billion of its stock. This move, if realized, would represent a significant development in Japan's ongoing corporate governance reform efforts. The sale, estimated at around 3 trillion yen, could be larger depending on shareholder participation and is targeted for completion as early as this year, though details remain fluid.
This initiative aligns with directives from regulators and the Tokyo Stock Exchange, which have been encouraging Japanese companies to reduce their cross-shareholdings. Such practices, historically used to solidify business relationships, have drawn criticism from governance experts and international investors for potentially shielding management from shareholder accountability.
The world's largest automaker aims to use buybacks or a secondary sale to other investors to facilitate the divestment. This action underscores Toyota's commitment to enhancing capital efficiency and addressing governance concerns, a stance reinforced by a source close to the matter.
This strategic move occurs as Toyota is also engaged in a tender offer for forklift maker Toyota Industries, facing opposition from activist investor Elliott over valuation and transparency. The automaker has extended the tender offer period due to insufficient shareholder support.