Reports this week indicate that Toyota Motor Corporation Chairman Akio Toyoda has proposed a ¥6 trillion (approximately $42 billion) buyout of Toyota Industries Corporation, a core affiliate of the automaker, according to Reuters.
Though Toyota Industries has denied receiving a formal offer from either Toyoda or the broader Toyota Group, the news sent shockwaves through global markets, according to Yahoo Finance.
Shares of Toyota Industries surged 23%—its biggest single-day gain since 1975—while Toyota Motor’s stock dipped slightly on April 30, closing at $191.22, down from $195.39 the previous day, ETF Trends said.
The rumored buyout is being interpreted as a potential move to simplify Toyota’s famously tangled network of cross-shareholdings and improve corporate governance—a step long called for by investors and governance advocates.
Toyota Industries, which supplies vital components such as air-conditioning systems and is a shareholder in Toyota Motor itself, has historically been tightly interwoven with the automaker’s operations.
Analysts suggest that taking Toyota Industries private could increase transparency, boost investor confidence, and streamline decision-making within the Toyota ecosystem, CBT News said.
The Japanese auto giant—currently the world’s top seller—said it regularly reviews the best strategies for its investments in group companies, but no decisions have been finalized, Morningstar said.
