,insurers 2024-07-27
Toyota Motor Corp. will buy back 806.8 billion yen ($5.2 billion) worth of shares from major Japanese banks and insurance companies to reduce the strategic holdings of financial partners, Bloomberg reported. Toyota said in a statement, Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Tokio Marine Holdings Inc. and MS&AD Insurance Group Holdings Inc. will sell their shares at 2,781 yen each, an 11 percent discount to their closing price on July 23. The company aims to increase shareholder returns and free up capital to invest in efforts to become carbon neutral. The buyback is part of a 1 trillion yen buyback plan announced by Toyota in May to meet the Japanese government’s demand that big companies shed decades of cross-shareholdings to cement business ties. While cross-shareholdings have improved governance to some extent, large banks and corporations have not reduced cross-shareholdings in time. Given the size and significance of Toyota’s share buyback, it could trigger a wave of cross-shareholdings reduction in Japan. Seiji Sugiura, a senior analyst at Tokai Tokyo Intelligence Laboratory Co., said, “For shareholders, this is good news. “Since Toyota announced the buyback, everyone has been waiting.” In June, Bloomberg reported that Mitsubishi and Sumitomo planned to begin spinning off their stakes in Toyota, worth 1.32 trillion yen. In addition to MS&AD Insurance and Tokio Marine Holdings, Sompo Holdings also holds a large stake in Toyota. If these companies sell their Toyota shares, the total amount will exceed 3 trillion yen. The banks and insurers are understood to be planning to divest their Toyota shares over an extended period of time, lasting several years, either significantly reducing their holdings or selling them entirely. Managing
Editor: Anton
