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Japan Times
6 days ago
- Automotive
- Japan Times
For Toyota, more Akio Toyoda would be a good thing
Akio Toyoda, the scion of Toyota Motor's founding family and former chief executive officer, generally seems to prefer being behind the wheel of a car than being in the spotlight. But with the $33 billion buyout of Toyota Industries announced Tuesday, along with his personal investment, he might be making a corporate comeback. That would be a good thing, regardless of what the critics say. Opinion is divided on whether the takeover represents a step forward or back for corporate governance in Japan. Investors and officials have long sought the dissolution of parent-child listings like Toyota Industries, in which the larger automaker holds a controlling stake; the lack of independent oversight has been blamed for past safety lapses. But many suspect the take-private is actually about Akio Toyoda (for the sake of simplicity, hereafter referred to as Akio) reasserting control over the company he ran until 2023. He is staking just ¥1 billion ($7 million) of his own cash in the deal, but it's a complex structure that also involves the unlisted real estate firm Toyota Fudosan — which Akio chairs — taking over Industries. That firm was first set up by Sakichi Toyoda, his great-grandfather, to make automatic looms in the 1920s. From this company, Toyota Motor, a division founded by Sakichi's son Kiichiro, was spun off in 1937. It's unclear how much control Akio, who has been reported to be behind the bid, would exert after the deal is complete. But not everyone would be happy with a return. "Akio Toyoda ran Toyota for 14 years. Some fear he still does,' said the New York Times last year. Fully two-thirds of foreign institutional investors opposed his re-election as a director at 2024's annual general meeting. Proxy advisers Glass Lewis and Institutional Shareholder Services both urged the AGM to vote against him, citing governance issues and a supposed scandal around cutting corners during safety tests. His overall support rate among shareholders of 72% was the lowest of any director in Toyota's history. "I'm being told 'no' by foreign investors,' he said at the time. "At this pace, I can't be a director next year.' This opposition is nonsensical. Akio turned Toyota into the biggest automaker in the world during a period of intense industry change. Under his leadership, it recorded the single best-ever quarter of profit by a Japanese company, and became the country's largest-ever business by market capitalization, surpassing a 37-year bubble-era record. The returns for shareholders over his time in office dwarf those of his peers at other automakers, many of whom are paid far more. As I wrote last year, the safety "scandal' for which investors were willing to vote him out was a nothingburger that had zilch in common with the management-led fraud of Volkswagen's Dieselgate. The issue was little more than corners being cut and once retested, all vehicles passed with flying colors. This was a safety scandal that not only didn't involve a single fatality, but didn't even involve a single accident. Contrast with, say, U.S. authorities' probe of Tesla's automated driving feature. Another concern is informal family control of public companies, common in Japan while raising eyebrows elsewhere. But investors should relax: From Capcom (with the stock price having risen by 14 times since Haruhiro Tsujimoto, son of founder Kenzo, took over as president in 2007) to Sanrio (up 12 times since 2020, when Tomokuni Tsuji took over from his grandfather), there's plenty of evidence to show it can work. In past years, investors were also unhappy with the pace of Toyota's plans to electrify. Akio became a convenient lightning rod for all kinds of opposition, with the likes of Greenpeace piling on to dismiss its efforts to decarbonize. But this COVID-19-era obsession with full electrification at all costs seems now as quaint as the same period's nonfungible tokens boom. Today, competitors have been forced to retreat from their grandiose plans to abandon internal combustion engines, while Toyota has gone from strength to strength due to its hybrids and unwillingness to bow to the tyranny of the majority. Indeed, through his promotion of hybrid technologies, Akio may well have done more for emissions than any single executive on earth, with Toyota estimating its vehicles have reduced global emissions of carbon dioxide by nearly 200 million tons. In other realms, it's understood that executives shouldn't let perfect be the enemy of good. Yet Akio rarely gets afforded this leeway. There are few hagiographies from the business press or gushing profiles like his erstwhile peer at Japanese automaker Nissan Motor, Carlos Ghosn, enjoyed both before and after his trouble with the law. Akio doesn't feature in glowing portraits in New York magazines, nor is he the type of executive profiled in business books, a privilege these days often reserved for crypto frauds. He doesn't feature on lists of world's greatest executives, and, indeed, he is perhaps still best known for his appearance before the U.S. Congress in 2010 during the unintended acceleration scandal — another incident that may have been grossly exaggerated. Akio may choose to continue in the background or even retreat further once this deal is done. But if anything, investors should be handing him the keys. Gearoid Reidy is a Bloomberg Opinion columnist covering Japan and the Koreas.
Yahoo
03-06-2025
- Automotive
- Yahoo
The Company That Started Toyota Plans to Go Private in a $34 Billion Deal
The nearly century-old Japanese company that founded Toyota Motor in the 1930s plans to go private in a deal that values the now-forklift maker at about $34 billion, with backing from the car giant's chairman, Akio Toyoda, and other group companies. Toyota Fudosan, the group's real-estate arm, said Tuesday that it will set up an entity to start a tender offer to acquire shares of Toyota Industries and take it private. How Moderna Went From Pandemic Hero to Vaccine Victim Walt Disney Co. to Lay Off Hundreds Bitcoin Goes All In on MAGA, Shedding Its Antigovernment Slant Meta Aims to Fully Automate Ad Creation Using AI Jamie Dimon Says He Isn't Retiring Anytime Soon The real-estate firm is privately held by Toyota group companies. Toyoda serves as its chairman. The company said it expects to control a 99.44% stake in the entity that will fully own Toyota Industries following a series of transactions, with Toyoda holding the remaining share. Toyota Industries, from which Toyota Motor was spun off in 1937, produces forklifts, cars, engines, other auto parts and textile machinery. It was founded by Sakichi Toyoda, Akio Toyoda's great-grandfather. Today, Toyota Motor is the biggest shareholder in the affiliate, owning about one-quarter of the company. Meanwhile, Toyota Industries has a stake of about 9% in the Japanese automaker. Toyota Industries, which is focusing on developing autonomous technologies for forklifts and logistics management software, plans to further advance these activities through the privatization while deepening collaboration within the group. The move comes as some corporate management teams have opted to go private in Tokyo recently as financial regulators press them to boost shareholder returns and shareholder activism gains traction. Attempts are sometimes unsuccessful, as buyouts require large sums of money. In late April, Toyota Industries said it would oppose proposals by French investment fund Longchamp, represented by Dalton Investments, at its general shareholders' meeting next week. Longchamp is proposing that outside directors make up most of the board to address concerns about potential conflicts of interest between its large and minority shareholders, according to filings by the Japanese company. The real-estate company, Toyota Fudosan, said Tuesday that it will offer to buy shares of Toyota Industries for 16,300 yen each. It aims to begin the tender offer in early December. That values the company at about Y4.9 trillion, equivalent to $34.34 billion, based on about 300 million shares outstanding. Shares ended 0.8% higher at Y18,400 on Tuesday. They were below Y13,000 in mid-April, before the company said it received various proposals, including one to take the business private. Group companies Aisin, Denso and Toyota Tsusho said they plan to sell their stakes in Toyota Industries in the tender offer. Toyota Motor and the three companies plan to buy back their shares from Toyota Industries following the tender offer, and Toyota Industries plans to buy back its shares from Toyota Motor after it is delisted. Write to Kosaku Narioka at Universal, Warner and Sony Are Negotiating AI Licensing Rights for Music Paramount Nominates Three New Directors, Sets July 2 Annual Meeting China's Manufacturing Activity Tumbles Into Contraction as Orders Drop Why Nvidia Can't Just Quit China Campbell's Snack Business Struggles as Consumers Get Pickier About Food Spending
TimesLIVE
03-06-2025
- Automotive
- TimesLIVE
Toyota to take key supplier private in $26bn deal
Toyota will take a group supplier private in a $26bn (R464.49bn) deal, the companies said on Thursday, a landmark repositioning of Japan's most important corporation that signals the enduring influence of its founding Toyoda family. An unlisted real estate company chaired by Toyota chair Akio Toyoda will offer ¥3.7-trillion (R463.19bn) to take Toyota Industries, a maker of forklifts and engines, batteries and converters, off the market. While the deal was widely expected, the price may come as a shock. The real estate firm, Toyota Fudosan, is offering ¥16,300 (R2,037) a share — below the stock's latest closing price of ¥18,400 (R2,300). Previous media reports indicated the deal would probably happen at about $42bn (R750.26bn), a 62% premium to the offer price. Separately, Toyota said it plans to buy back its own shares from Toyota Industries.
Reuters
03-06-2025
- Automotive
- Reuters
Toyota to take key supplier private in $26 billion deal
TOKYO, June 3 (Reuters) - Toyota (7203.T), opens new tab will take a group supplier private in a $26 billion deal, the companies said on Thursday, a landmark repositioning of Japan's most important corporation that signals the enduring influence of its founding Toyoda family. An unlisted real estate company chaired by Toyota Chairman Akio Toyoda will offer 3.7 trillion yen ($26 billion) to take Toyota Industries (6201.T), opens new tab, a maker of forklifts and engines, batteries and converters, off the market. Sign up here. While the deal was widely expected, the price may come as something of a shock. The real estate firm, Toyota Fudosan, is offering 16,300 yen a share - below the stock's latest closing price of 18,400 yen. Previous media reports indicated the deal would likely happen at around $42 billion, a 62% premium to the actual offer price. Separately, Toyota said it plans to buy back its own shares from Toyota Industries. Japanese companies have come under growing scrutiny from the market regulator and investors in recent years about their cross-shareholdings in affiliates and business partners, sparking a rise in both management buyouts and acquisitions. Many of the deals have been driven by expectations that a corporate governance overhaul will bring better shareholder returns. Toyota had said in April it was considering participating in a potential buyout of Toyota Industries - a move that sources have said would help improve the group's corporate governance. Toyota owned about 24% of Toyota Industries as of September last year, while Toyota Industries held around 9% of the world's biggest automaker and more than 5% of Denso (6902.T), opens new tab, another major Toyota supplier and Toyota group company. Toyota Industries, formerly Toyoda Automatic Loom Works, was founded in 1926 by Sakichi Toyoda to make automatic looms. An automotive division within the company was set up and later spun off as Toyota Motor. ($1 = 142.6500 yen)
CNBC
03-06-2025
- Automotive
- CNBC
Toyota to take key supplier private in $26 billion deal
Toyota will take a group supplier private in a $26 billion deal, the companies said Thursday, a landmark repositioning of Japan's most important corporation that signals the enduring influence of its founding Toyoda family. An unlisted real estate company chaired by Toyota Chairman Akio Toyoda will offer 3.7 trillion yen ($26 billion) to take Toyota Industries, a maker of forklifts and engines, batteries and converters, off the market. While the deal was widely expected, the price may come as something of a shock. The real estate firm, Toyota Fudosan, is offering 16,300 yen a share - below the stock's latest closing price of 18,400 yen. Previous media reports indicated the deal would likely happen at around $42 billion, a 62% premium to the actual offer price. Separately, Toyota said it plans to buy back its own shares from Toyota Industries. Japanese companies have come under growing scrutiny from the market regulator and investors in recent years about their cross-shareholdings in affiliates and business partners, sparking a rise in both management buyouts and acquisitions. Many of the deals have been driven by expectations that a corporate governance overhaul will bring better shareholder returns. Toyota had said in April it was considering participating in a potential buyout of Toyota Industries - a move that sources have said would help improve the group's corporate governance. Toyota owned about 24% of Toyota Industries as of September last year, while Toyota Industries held around 9% of the world's biggest automaker and more than 5% of Denso, another major Toyota supplier and Toyota group company. Toyota Industries, formerly Toyoda Automatic Loom Works, was founded in 1926 by Sakichi Toyoda to make automatic looms. An automotive division within the company was set up and later spun off as Toyota Motor.
