Toyota raises Toyota Industries buyout offer 15% to US$34bn

Toyota Motor has raised its offer to buy subsidiary Toyota Industries to JP¥5.4tr (US$34bn) after activist investors and shareholders accused the carmaker of severely undervaluing the firm in one of the world’s largest take-private attempts. The Japanese automaker stated on Wednesday it had increased its bid by 15% to JP¥18,800 per share from the original ¥16,300 proposal announced in June 2025.

The revised offer follows months of pressure from investors including Elliott Investment Management, which disclosed a 5% stake in Toyota Industries back in November 2025, and threatened to assemble a blocking position with other shareholders. Toyota Industries requested the higher bid in December after its share price rose above JP¥18,000 in the second half of 2025. At the time it stated that the likelihood of success at the original price was not very high. The board now recommends that shareholders tender their shares in the offer running from 15 January through to 12 February.

The initial JP¥4.7tr proposal drew intense criticism for its opaque valuation method and low premium, with the JP¥16,300 offer representing an 11% discount to Toyota Industries’ closing price on the date of announcement. The deal would place the engine and component supplier under control of Toyota Fudosan, an unlisted real estate company helmed by Group Chairman Akio Toyoda, strengthening the founding family’s grip on Japan’s largest business empire. 

In a statement, Toyota emphasised that Toyoda was not involved “whatsoever” in the renegotiation and that the revised terms would not “unjustly confer benefits” to the chairman. At the same time, however, it could be argued that the Chairman’s exclusion from renegotiations could be an effort to insulate the tentative deal from further criticism that it benefits the founding family at the expense of minority stakeholders. 

Despite the higher price, some analysts argue the offer still fails to deliver fair value. Travis Lundy, an independent special situations analyst, noted to Financial Times that Toyota Industries’ book value per share at end-December was likely above JP¥19,000, adding this “could be underplaying the benefits of the deal, in terms of tax, to Toyota Motor”. He argued the offer “needs to be above JP¥25,000 to be considered anywhere near fair”.

The transaction is being closely watched as a test of corporate governance reform in Japan, where regulators are pushing companies to unwind cross-shareholdings that can lead to abuse of minority shareholder rights. The wider effort aims to streamline the complex ownership structure within the Toyota Group as the automaker expands its business model beyond traditional vehicle production.

Toyota Industries predated and gave birth to Toyota Motors; today it is the world’s largest manufacturer of materials handling equipment including forklifts and warehouse automation systems. It still produces engines, air-conditioning compressors, and electronic components for Toyota Motor’s vehicle range. The company assembles complete vehicles under contract such as the RAV4, manufactures internal combustion engines for models including the Land Cruiser and Hilux, and is the world’s leading supplier of automotive air-conditioning compressors by sales volume.