General contractor Taisei to buy out Toyo Construction
Taisei is aiming to buy all Toyo Construction shares partly through a tender offer. Toyo Construction expressed support for the tender offer, which will run from Tuesday to Sept. 24. Each share will be purchased at ¥1,750 in the tender offer.
Both companies are listed on the Tokyo Stock Exchange's top-tier Prime section. The stock of Toyo Construction closed at ¥1,644 on Friday.
All procedures related to the acquisition are expected to be completed at the end of December.
Through the move, the two companies hope to expand their business and strengthen their earnings power while streamlining operations, amid persistent labor shortages and elevated material prices.
Combined consolidated sales at Taisei and Toyo Construction in the business year to March 2025 stood at about ¥2.32 trillion, close to some ¥2.62 trillion at Obayashi, the second-largest player in the Japanese construction industry, in the same year.
Yamauchi No. 10 Family Office (YFO), the asset management company for the founding family of Japanese game giant Nintendo, has an equity stake of 28.53% in Toyo Construction.
Infroneer Holdings owns 20.19% of Toyo Construction through subsidiary Maeda, a Japanese general contractor.
In the past, YFO and Infroneer Holdings separately proposed a tender offer to Toyo Construction. However, neither company ultimately launched such a move.
YFO and Maeda are expected to sell their Toyo Construction stakes to Taisei.
At a news conference Friday, Taisei Chairman Shigeyoshi Tanaka said he believes that his company and Toyo Construction will be able to leverage their respective prowess in construction projects related to decarbonization and offshore wind power generation for which demand is expected to grow.
Toyo Construction Chairman Shinya Yoshida cited large benefits, such as synergy effects, for the company's decision to become a Taisei unit.
The Japanese construction industry has seen other recent realignment moves. Infroneer Holdings announced in May that it would acquire Sumitomo Mitsui Construction for about ¥94 billion.
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