Toyota Industries Shares Slide 13% After $33 Billion Buyout Deal Announcement

Shares of Toyota Industries Corp. plunged as much as 13% on Wednesday, following the announcement of a 4.7 trillion yen ($33 billion) deal by Toyota Group to take the company private—marking the stock’s steepest one-day fall in nearly ten months.

The market reaction reflects investor concerns over the valuation, with the tender offer price set at 16,300 yen per share, significantly lower than the stock’s Tuesday closing price of 18,400 yen, according to Reuters.

Market Disappointment Over Offer Price

Analysts have flagged the offer as unattractive. Arun George, global equity research analyst at SmartKarma, said the deal price was below the valuation range provided by independent financial advisers.

“The special committee requested three times that the offeror improve its JPY16,300 final offer, but was rebuffed,” George noted.

Strategic Shift Amid Cross-Shareholding Pressure

The proposed buyout comes amid increasing regulatory pressure in Japan to unwind cross-shareholding structures—a long-standing practice among corporate groups. The Financial Services Agency has called for reforms, citing governance and transparency concerns.

Toyota Industries, which originally founded Toyota Motor, has used cross-shareholding strategies historically to ward off hostile takeovers. However, observers say the group is now responding to shifting regulatory and shareholder expectations.

“We can expect more of these unwinding deals within the Toyota Group,” said Kei Okamura, Managing Director at Neuberger Berman.

Deal Structure and Financing

The buyout will involve the formation of a new holding company, with financing contributions from multiple arms of the Toyota Group:

• Toyota Fudosan, the real estate subsidiary, will invest 180 billion yen

• Toyota Motor Chairman Akio Toyoda will contribute 1 billion yen

• Toyota Motor Corp. will invest 700 billion yen via non-voting preferred shares

The rest of the financing will come from loans extended by Sumitomo Mitsui Banking Corporation, MUFG Bank, and Mizuho Bank.

Strategic Implications

Toyota Motor had previously disclosed in April that it was evaluating various investment options in Toyota Industries, including a partial stake in a buyout. While the tender price drew criticism, some analysts argue the transaction could unlock longer-term value.

“If the proceeds from shareholding unwinding are reinvested in growth, this could improve capital efficiency across the Toyota Group,” Okamura added.

Broader Industry Context

The buyout comes as the global automotive industry navigates geopolitical headwinds. In April, U.S. President Donald Trump announced a 25% tariff on automobile imports, a move expected to hit Toyota Motor hard due to its heavy exposure to the American market.

Toyota Industries remains a critical part of the group’s supply chain, producing forklifts, engines, electronic parts, and stamping dies.

As of 1:12 PM JST, Toyota Industries shares were trading at 16,110 yen, down 2,290 yen or 12.45%.