Toyota Plans $19 Billion Share Sale in Major Corporate Governance Reform Move

Toyota Motor Corp is preparing a large-scale unwinding of its strategic shareholdings in a move that could total around 3 trillion yen ($19 billion), according to two sources familiar with the matter. If completed, the transaction would mark a significant milestone in Japan’s ongoing corporate governance reform and efforts to reduce cross-shareholdings among major corporations.

The planned sale would involve Japanese banks and insurance companies offloading Toyota shares as part of a broader push to dismantle long-standing cross-shareholding practices. These arrangements, where companies hold shares in each other to strengthen business relationships, have historically shielded management from shareholder pressure. However, regulators and the Tokyo Stock Exchange have increasingly encouraged firms to improve transparency, capital efficiency, and shareholder returns by reducing such holdings.

Sources said Toyota aims to execute the share sale as early as this year, though the final timing and size will depend on investor participation. The automaker may repurchase shares through buybacks, while a secondary offering to other investors is also under consideration. Plans could still change or be scrapped depending on market conditions and shareholder response. Toyota declined to comment, and the sources requested anonymity due to the confidential nature of the discussions.

Toyota’s major shareholders include financial institutions such as Sumitomo Mitsui Financial Group, Mitsubishi UFJ Financial Group, and MS&AD Insurance Group, many of which have already announced policies to scale back cross-shareholdings.

The initiative comes as Toyota faces heightened scrutiny over corporate governance and capital management. The company is currently conducting a tender offer for Toyota Industries, a deal opposed by activist investor Elliott, who argues the offer undervalues the forklift maker and lacks transparency. Toyota recently extended the tender deadline to March 2 after insufficient shareholder backing.

By accelerating the reduction of strategic shareholdings, Toyota appears determined to signal its commitment to governance reform and align more closely with global shareholder expectations.