Shares of Toyota Industries were set for their biggest daily jump on record on Monday after Japanese automaker Toyota said it was considering a potential buyout of the key parts supplier, which has a market value of 4 trillion yen ($28 billion).
Toyota Industries shares remained untraded with a glut of buy orders on Monday. The bid and ask prices indicated that shares were poised to hit the daily upper limit of 16,225 yen, a 23% jump from Friday’s closing price of 13,225 yen, according to Reuters calculations based on market data.
Such a rise would mark the stock’s largest one-day gain in at least four decades, based on LSEG data stretching back to early 1984.
On Saturday, Toyota said in a filing with the Tokyo Stock Exchange that it was exploring various possibilities regarding Toyota Industries, including a potential partial investment. Meanwhile, Bloomberg News reported that Toyota Chairman Akio Toyoda and his founding family had proposed a full acquisition valued at around 6 trillion yen.
Toyota Industries, for its part, confirmed it had received proposals about going private through a special purpose company, but denied that it had received a direct buyout offer from the Toyota chairman or the Toyota group.
The potential buyout comes amid increasing pressure on Japanese companies to unwind complex cross-shareholdings with affiliates and business partners. Such arrangements, often designed to cement long-term relationships, have faced scrutiny from investors for reducing corporate transparency and efficiency.
Toyota currently owns about 24% of Toyota Industries, while Toyota Industries holds just over 9% of Toyota Motor shares and more than 5% of Denso Corporation, another major Toyota supplier.
Analysts at Bernstein recently noted in an April 23 report that the potential sale of Toyota Industries’ stake in Toyota Motor would be a “strong positive catalyst” for its stock. They suggested that if Toyota were to privatize Toyota Industries, it could simultaneously repurchase its own shares and acquire Toyota Industries’ lucrative materials handling equipment business — notably its forklift division — at minimal cost.
Toyota Industries, formerly Toyoda Automatic Loom Works, has a deep history tied to Toyota’s origins. Founded in 1926 by Sakichi Toyoda, it originally manufactured automatic looms before branching into automotive parts. Its automotive division eventually spun off to become Toyota Motor.
Today, Toyota Industries not only manufactures forklifts but also produces vehicles like the Toyota RAV4, engines, air-conditioning compressors, and various electronic automotive components such as batteries and converters.
If the buyout proceeds, it could mark a major shift in the structure of Japan’s largest automotive empire, giving Toyota Motor even greater control over its critical supply chain at a time when efficiency and resilience are paramount in global manufacturing.
