By River Davis
Toyota Motor said it plans to sell about 125 million shares in its top auto-parts supplier Denso, a stake worth about $1.95 billion based on Denso's share price as of Wednesday's close.
Toyota's stake in Denso would fall to 20% from around 24%, Toyota Chief Communications Officer Jun Nagata said, speaking online Wednesday. Denso said in a separate statement that it would buy back up to 125 million shares.
The move comes as Japanese companies face pressure to unravel stakes they have long held in business partners or fellow companies in their conglomerate groups. Some investors say such cross-shareholding structures prop up entrenched management and depress stock valuations. Toyota has also been ramping up its investments in electric vehicles.
Going forward, Toyota plans to hold on to some stakes in affiliate companies while replacing investments deemed "not having significance," Nagata said. Toyota will reinvest proceeds from the Denso share sale in Toyota's future growth, he said.
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(END) Dow Jones Newswires
November 29, 2023 03:30 ET (08:30 GMT)Copyright (c) 2023 Dow Jones & Company, Inc.