Toyota Motor will buy back ¥806.8 billion ($5.2 billion) worth of its stock from major Japanese banks and insurers as part of a broader push to unwind strategic shareholdings with financial partners.
Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, Tokio Marine Holdings and MS&AD Insurance Group Holdings are tendering their shares at ¥2,781 apiece, an 11% discount to their closing price on Tuesday, Toyota has said in a statement.
The buybacks are part of a ¥1 trillion repurchase plan announced by Toyota in May, and are also aimed at satisfying the Japanese government’s push to get big enterprises to unwind cross-held shareholdings forged over decades to cement business relationships. While that has brought some measure of accountability for management and improved governance, the biggest banks and businesses had been slow to unwind their holdings. Given its scale and significance, the Toyota deal could trigger a broader wave of looser equity ties in Japan.