Toyota pushes for massive $42B parts supplier buy
Keeping a global powerhouse of automotive manufacturing like Toyota moving requires many moving parts. In many cases, it means parts suppliers. The automaker’s chairman and former CEO, Akio Toyoda, wants to tighten things up by acquiring one of its heavily relied-upon suppliers. But it’ll cost Toyota quite a bit of cash to pull it off.
Toyota Chairman Akio Toyoda pushes for a record buyout of parts supplier Toyota Industries for a staggering 42 billion USD
The chairman of Toyota Motor Corporation and former CEO, Akio Toyoda, proposed a record-breaking buyout of parts supplier Toyota Industries. With a name like that, you’d think Toyota would already have control of the supplier. But components for the automotive titan are just a portion of what Toyota Industries produces. The supplier also manufactures textile machinery and electronics.
Either way, The Japan Times reports that a possible acquisition is in the works. And it’s a massive one. Toyota’s proposed purchase values the parts supplier at around six trillion yen, or 42 billion dollars. In fact, the proposed buyout would be one of the most substantial buyouts in the history of international business. Not bad for a Toyota-eats-Toyota proposition.
However, the buyout is still in the early phases. There’s no guarantee that the record-smashing acquisition will go through as proposed. It’s also not much of a screaming deal. The $42 billion proposition represents a 40% premium over the parts supplier’s value at Tokyo’s closing bell on Friday.
Toyoda’s insistence on a ‘multi-pathway’ strategy has paid off and then some
Toyota Chairman Akio Toyoda’s approval among his shareholders isn’t, well, confidence-inspiring as of recent years. However, Toyoda’s commitment to a multi-pathway strategy hasn’t waivered. But even without tidal waves of shareholder support, Toyoda’s gamble paid off. Global hybrid sales are off the charts for the brand. So much so that the Japanese automaker has had difficulty meeting worldwide demand.
Still, Toyota’s reliance on individual parts suppliers was highlighted by a recent Aichi Prefecture factory explosion. The explosion, which happened at a Fujioka Toyota parts supplier plant, hampered RAV4 production for around a week.
While that doesn’t sound like much, the RAV4 is an international best-seller for the brand. In the US, the RAV4 is the only vehicle from any segment to outsell the perennially popular Ford F-150 in decades.
