Toyota starts a billion-dollar share buyback and thereby breaks ties with other large Japanese companies. The world’s largest car manufacturer announced on Tuesday that it would remove up to 807 billion yen (4.75 billion euros) of its own shares from the market. As part of the program, Toyota is offering 2,781 yen per share.
In a separate statement, financial investors SMFG, Tokio Marine Holdings and MS&AD Insurance Group announced that they would sell their Toyota shares back to the Japanese car manufacturer. Last month, Bloomberg reported that major banks Mitsubishi UFJ Financial and Sumitomo Mitsui Financial wanted to sell their shares in the car company worth a total of $8.5 billion.
The announced buyback campaign starts against the backdrop of a governance initiative by the Tokyo Stock Exchange. This is pushing large companies to dissolve mutual holdings.
The interconnection of corporations with each other became… Japan has long been seen as a means of strengthening business relationships. However, experts and international investors believe that cross-holding of shares leads to lax corporate governance because it protects management from shareholders.