Toyota Motor to Buy Back More Than $5 Billion of Shares From Japan Banks, Insurers — 2nd Update

By Kosaku Narioka

Toyota Motor plans to buy back more than $5 billion of shares held by Japanese banks and insurers as part of efforts to unwind cross-shareholdings and improve balance-sheet efficiency.

The Japanese automaker said Tuesday that it will start a tender offer to repurchase shares worth 806.8 billion yen ($5.14 billion) at Y2,781 each, representing a 10% discount to Monday's closing price.

Toyota said it plans to buy 290.1 million shares from Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, MS&AD Insurance Group Holdings and Tokio Marine Holdings.

The automaker said it plans to sell shares in the four financial companies.

Toyota said in May it would buy back up to Y1 trillion of its shares by the end of April 2025, partly to respond to any divestment plans from its stakeholders. The tender offer announced Tuesday counts toward the Y1 trillion buyback program. Shares closed 0.6% higher at Y3,109 on Tuesday.

Japanese financial regulators have pressed companies to cut their stakes in other listed local companies to improve corporate governance. Advocates for a reduction in cross-shareholdings say banks and insurers that hold stakes in carmakers, for instance, may not oppose bad management decisions out of fear of losing their lending or insurance businesses.

Earlier this month, Honda Motor said it planned to offer shares worth billions of dollars currently held by Japanese banks and insurers, part of efforts to broaden its shareholder base and improve discipline over management.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

July 23, 2024 05:08 ET (09:08 GMT)

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