Toyota Motor (NYSE: TM) shares climbed higher in pre-market trading Monday after the automaker confirmed it is considering a potential acquisition of its key parts supplier, Toyota Industries Corp.
According to a Bloomberg News report published Friday, Toyota Chairman Akio Toyoda has proposed acquiring Toyota Industries in a transaction valued at around 6 trillion yen ($42 billion), aiming to strengthen his control over Japan’s largest business conglomerate.
The proposed buyout values Toyota Industries, a manufacturer of textile looms and automotive components, at a 40% premium to its closing share price last Friday, according to the report.
Following the news report, Toyota said in a filing with the Tokyo Stock Exchange on Saturday,
“We are currently exploring various possibilities, including partial investment.”
As of 05:04 EDT, Toyota Motor (NYSE: TM) stock rose 3.60% to $194.99. Meanwhile, Toyota Industries shares did not trade on Monday, as a surge in buy orders triggered a trading halt.
Japan has recently seen a notable rise in management buyouts and corporate acquisitions, driven by expectations that corporate governance reforms will boost shareholder returns and by optimism that the economy has finally turned the corner after years of painful deflation.
However, not all buyout attempts have been successful. Earlier this year, the founding family of retailer Seven & i Holdings abandoned a $58 billion management buyout bid after failing to secure financing. The collapse of that deal has given Canadian rival Alimentation Couche-Tard a renewed opportunity to pursue a takeover of Seven & i.
Salman Akhtar is a finance, stocks, and technology journalist with years of experience across various news organizations. He has contributed his expertise to outlets such as 24NewsHD, TrimFeed, The Voice Pakistan, and TheTechBasic. Salman is passionate about making complex topics accessible to a broad audience. His dedication to delivering accurate and timely information has established him as a trusted voice in the industry. Read Full Bio
