Toyota Motor, Denso and Toyota Industries plan to sell a combined stake of at least 12.5% in Aisin, a key affiliated supplier of automotive components and systems, as Japan’s leading automotive group continues with its strategy of reducing cross shareholdings among affiliated companies.
At the end of last year, Toyota Motor, Toyota Industries and Aisin sold a combined 10% stake in Denso with companies within the group looking to free up capital to invest in the transition to battery electric vehicles (BEVs) and invest in technology development.
The three affiliated companies have not decided on the sales price of their Aisin shares but, at current market prices, the combined 12.5% stake up for sale is worth JPY177bn (US$1.1bn).
Toyota Industries, which holds 13m shares in Aisin, said planned to sell part (around half) of its stake, adding it “recognizes that improvement of profitability, capital efficiency and asset efficiency is one of the important management issues in aiming at sustainable business growth and increased corporate value over the mid- to long-term”.
Toyota Motor said it aimed to sell a 4.8% stake in Aisin, which would reduce its stake to 20%, as part of a “revision of capital ties aimed at the growth of the Toyota Group, an initiative that has been under way since last year”. The automaker also said it intends to “carefully review its capital ties with other group companies on an individual basis, examining elements such as human resources, operations, culture, and business relationships while exploring the potential for strengthening competitiveness”.
Aisin, which makes a wide range of automotive components including braking, transmission and body systems for internal combustion engine (ICE), hybrid and electric vehicles, said it planned to “implement a secondary offering, cancel the company’s treasury shares, implement a (three for one) stock split and repurchase treasury shares”. The moves were designed to strengthen its growth strategy, enhance its appeal to existing and new shareholders by increasing shareholder returns, and improve capital efficiency.
