Toyota, the world’s leading automaker, announced Tuesday its decision to privatize its auto parts manufacturing subsidiary, Toyota Industries. The deal reportedly values the unit at over $40 billion.
Toyota Industries, which also produces forklifts and other industrial vehicles, will transition into a private entity under a holding company that includes Toyota Motor and other stakeholders, as confirmed by both firms. Prior to this announcement, Toyota Motor held approximately a 23 percent stake in Toyota Industries, the original company that evolved from a family loom business into the modern Toyota Motor Corporation.
Media reports preceding the announcement estimated the valuation of Toyota Industries at $42 billion.
According to Bloomberg Intelligence analyst Tatsuo Yoshida, taking Toyota Industries private “would allow more freedom in management” and could benefit long-term investors. However, Yoshida had previously cautioned in April that such a buyout would necessitate a significant fundraising effort, raising questions about its overall economic rationale.
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