Toyota Motor and its affiliated companies are preparing to secure up to ¥3 trillion ($20.7 billion) in loans from financial institutions to help take Toyota Industries private, according to Nikkei sources.
The massive financing would fund a special purpose vehicle created specifically to launch a tender offer for Toyota Industries, a critical supplier that manufactures both automotive parts and industrial machinery including forklifts. Toyota Industries is expected to accept the buyout proposal, with the acquired company likely to bear the debt obligations following the transaction.
The move comes amid broader industry scrutiny of cross-shareholding arrangements that have defined Japan’s corporate landscape for decades. Toyota Motor currently owns about 24% of Toyota Industries, while Toyota Industries holds approximately 9% of the automaker. Analysts suggest the privatization could help improve Toyota Group’s corporate governance by unwinding these cross-shareholdings, which have faced increasing pressure from shareholders seeking better returns.
The total acquisition cost is estimated to reach around ¥6 trillion ($42 billion), representing a premium of roughly 40% over Toyota Industries’ previous market valuation of ¥4 trillion. The proposed buyout would consolidate control of Toyota Industries, which holds historical significance as the original company founded by Sakichi Toyoda in 1926 that later spawned what became the world’s largest automaker.
Financial institutions are expected to provide approximately half the total funding needed for the acquisition, with Toyota Group companies supplying the remainder.
