Toyota Motor and two of its group companies plan to sell about 10% of their shares in Denso, a major supplier of automotive components, by the end of the year, Reuters reported on Tuesday.
The stake is worth about $4.7 billion at current market prices, making it the second-largest share offering in Japan this year and the biggest in the auto industry in over a decade.
The move is part of Toyota’s strategy to raise funds for its transition to electric vehicles, which require heavy investment in research, development and production.
Toyota, Toyota Industries and Aisin will remain as major shareholders of Denso, which also plans to buy back some of its own shares to cushion the impact of the sale.
The sale of Denso shares follows Toyota’s announcement in July that it would sell a stake worth about $1.7 billion in telecoms company KDDI Corp. Toyota is the world’s top-selling automaker and aims to become a leader in battery electric vehicles, which are expected to dominate the future of mobility.
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