According to Bloomberg, Toyota Motor Corp.
Shares worth 806.
8 billion yen (approximately US$5.
2 billion) will be bought back from major Japanese banks and insurance companies to reduce strategic shareholdings of financial partners.
Photo source: Toyota Motor, Toyota said in a statement that Mitsubishi UFJ Financial Group Inc.
, Sumitomo Mitsui Financial Group Inc.
Tokyo Marine Holdings Inc.
and MS&AD Insurance Group Holdings Inc.
Shares will be sold at 2,781 yen per share, 11% lower than the closing price on July 23.
The company’s goal is to increase shareholder returns and free up money to invest in efforts to achieve carbon neutrality.
The buyback is part of a 1 trillion yen buyback plan Toyota announced in May to meet Japanese government demands that large companies get rid of decades of cross-shareholdings formed to consolidate business relationships.
Although cross-shareholdings have improved governance to a certain extent, large banks and companies have not reduced cross-shareholdings in a timely manner.
Given the size and significance of Toyota’s share repurchase, it may trigger a wave of reduced cross-shareholdings in Japan.
, Tokai Tokyo Intelligence Laboratory Co.
Seiji Sugiura, senior analyst at the company, said,”This is good news for shareholders.
Since Toyota announced its buyback plan, everyone has been waiting.
“, In June this year, Bloomberg reported that Mitsubishi and Sumitomo planned to start divesting their shares in Toyota, worth 1.
32 trillion yen.
In addition to MS&AD Insurance and Tokyo Maritime Holdings, Sompo Holdings also holds a large stake in Toyota.
If these companies all sell their Toyota shares, the total amount will exceed 3 trillion yen.
It is reported that these banks and insurance companies plan to divest their Toyota shares over a long period of time (lasting for several years), either significantly reduce their holdings, or sell them completely.
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