By Shota Mizuno and Shinnosuke Kurama

Yomiuri Shimbun Staff Writers

Toyota Motor Corp. and related companies have announced that Toyota Industries Corp., an origin company of the Toyota group, will be taken private.

Experts believe that the move comes to strengthen the group's rule on its member companies and speed up decision-making, as competition over next-generation technologies such as electric vehicles and automated driving intensifies.

"In order to grow as a 'mobility company' with a long-term vision, it is essential we make bold investments without being constrained by short-term performance," said Kenta Kon, a director of Toyota Fudosan Co., an asset management company of the Toyota group, at an online press briefing on Tuesday.

According to Toyota Fudosan, the Toyota group began reviewing capital ties within the group from fiscal 2023. In December 2024, Toyota Motor proposed to Toyota Industries to consider going private.

In recent years, Toyota Industries has occasionally faced intervention in its management from overseas shareholders.

Last year, French investment fund Longchamp SICAV demanded Toyota Industries buy back its shares. This year, the investment fund proposed a majority of the Toyota Industries' board move to be composed of outside directors.

The demands stirred backlash from Toyota Industries' management. "We need to consider how to deal with excessive demands from activist shareholders. There is no need to stick to being listed," said a senior official, hinting a review on the company's management structure, including delisting.

Toyota Industries is involved in a wide range of operations, including the production of Toyota Motor's vehicles, the manufacture of automotive and industrial engines, the production of forklifts, and the provision of logistics systems. "We will as a group holistically promote (becoming) a mobility company," said President Koichi Ito at the Tuesday press briefing. "Toyota Industries will assume a central role in the mission and become a driving force of the group," Ito added, stressing that going private is essential for the group's development.

Leading the transformation

During the process of going private, a holding company will be established to own Toyota Industries' shares. Akio Toyoda, of Toyota's founding family and serving as chairman of the automaker, will invest 1 billion yen in the holding company, toward a voting power of 0.5%. Toyota Fudosan will invest another 180 billion yen with a voting power of 99.5%. Toyoda also serves as chairman at Toyota Fudosan, but will not join directors of the board at the holding company. Instead, he will reportedly focus on "empowering workers at front lines" as a shareholder, sources said.

Toyoda is believed to have a soft spot toward Toyota Industries, the company from which Toyota Motor, the world's largest automaker, was born.

The Toyota group has been making efforts toward utilizing its capital more efficiently, such as reducing cross-shareholdings between member companies and investing in new technologies. However, Toyota Motor will now invest a massive 700 billion yen to take Toyota Industries private.

A general shareholders meeting is scheduled for both Toyota Motor and Toyota Industries this month. Shareholders are expected to focus their questions on the rationale behind the huge investment it would require to privatize Toyota industries, with the companies being required to explain their thinking sincerely and thoroughly.

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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.

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June 05, 2025 04:43 ET (08:43 GMT)

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