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Toyota Plans To Reduce Its Share in Denso

Toyota, with affiliates, to sell 10% of Denso shares, raising $4.7B for electric vehicles
Japan
t 7203.TSE d 6902.TSE Blue Chip 150
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Toyota Motor, along with affiliated companies, aims to divest approximately 10%, equivalent to around 700 billion yen ($4.7 billion), of its total shares in auto parts supplier Denso later this month. The move is part of Toyota’s strategy to diminish cross-shareholding and allocate funds for investments in electric vehicles. As of September’s conclusion, Toyota Motor held a 24% stake in Denso, while Toyota Industries and Aisin possessed 9% and 2%, respectively.

The Japanese automaker plans to reduce its holdings to approximately 20%, concurrently lowering Toyota Industries’ stake to 5%. Aisin is contemplating selling its entire shareholding. Some of the shares will be repurchased by Denso, which, on Tuesday, announced an ongoing examination of its capital policy without disclosing specifics.

This divestiture aligns with the broader Toyota group’s initiative to diminish cross-shareholdings stemming from historical business relationships. Despite earlier announcements, Toyota has encountered challenges in significantly reducing cross-holdings across its group companies, with concerns from investors about the potential impact on capital efficiency. In July, Toyota Motor disclosed plans to sell 250 billion yen worth of shares in telecommunications operator KDDI, with affiliated auto parts makers Aisin and JTEKT also intending to eliminate their cross-holdings in the future.

 

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