Prime Highlight:
- Toyota Motor increased its tender offer for Toyota Industries to 18,800 yen per share, sparking a record-high surge in the latter’s stock.
- The move reflects ongoing negotiations and investor expectations for a better deal as Toyota seeks to take its founding group company private.
Key Facts:
- The revised offer values the transaction at over $35 billion, up from the initial 16,300 yen per share bid announced in 2024.
- Toyota Industries, a key part of the Toyota group, manufactures forklifts, engines, electronic parts, and stamping tools and remains central to the company’s supply chain.
Background:
Shares of Toyota Industries surged to a record high on Thursday after Toyota Motor raised its tender offer price to take the company private. The forklift and components maker climbed nearly 6% to 19,080 yen, moving above the revised buyout price and signalling that investors expect a better deal.
Toyota Motor late Wednesday lifted its offer to 18,800 yen per share, up from the earlier 16,300 yen announced last year. The higher bid values the transaction at more than $35 billion. Shares of Toyota Motor also gained more than 2% in Thursday trading.
The Japanese carmaker first announced plans in 2024 to acquire Toyota Industries, the group company that originally founded Toyota Motor. The initial proposal valued the deal at about 4.7 trillion yen and included a personal contribution of 1 billion yen from Toyota chair Akio Toyoda. Toyota Motor had also planned to invest around 700 billion yen through non-voting preferred shares.
In December, Toyota Industries said it had asked for a higher price, warning that the original offer could fail. Market analysts now believe the new price may still fall short of fair value. Arun George of SmartKarma said the revised bid remains below the middle of the range suggested by independent advisers. Another analyst, Travis Lundy, said he expects activist investors to demand further changes or try to block the deal.
Toyota Industries makes forklifts, engines, electronic parts and stamping tools, and remains a key part of the Toyota group’s supply chain.
Meanwhile, Toyota Motor continues to face pressure in its core business. The company reported that global production fell 5.5% year on year to 821,723 units in November, its first drop in six months. Global sales also declined 2.2%, with weaker demand in China following a cut in purchase subsidies.
Toyota has also warned of a major hit from U.S. tariffs, estimating a 1.45 trillion yen impact this financial year, even as it plans to invest heavily in its American operations.