Toyota Increases Offer for Toyota Industries
Toyota shares surged 4% on Thursday, reaching an all-time high after the company significantly raised its buyout offer for Toyota Industries to over $35 billion, a substantial increase from its previous bid last year.
Shares of Toyota Industries also saw a notable rally, climbing nearly 6% to 19,080 yen, exceeding the new offer price of 18,800 yen.
Late Wednesday, Toyota announced its intention to acquire the remaining shares of Toyota Industries at 18,800 yen per share, which translates to approximately $118.11. This revised offer represents a more than 15% increase from the initial bid of 16,300 yen per share made in June of the previous year. The primary objective of this move is the complete privatization of Toyota Industries.
Toyota Industries' Response to the Offer
In the preceding year, Toyota had attempted to acquire the entirety of the Toyota Group, a prominent Japanese corporate entity, for 4.7 trillion yen. This proposed deal included contributions of 1 billion yen from Chairman Akio Toyoda's personal funds and 700 billion yen in non-voting preferred shares.
However, by December, Toyota Industries expressed its dissatisfaction, stating that the offer was insufficient and requesting a higher valuation. This stance appears to have influenced the current revised offer.
Despite the increased offer, some resistance remains. The new price point is still below the midpoint of the valuation range suggested by an independent advisory firm. This discrepancy suggests that Toyota Industries might still be considered undervalued, even with the enhanced bid. The fact that the stock price has already surpassed the revised offer price further supports this notion.
Toyota Industries' Business Scope
Toyota Industries, the entity that originated the Toyota brand many decades ago, is far from a minor subsidiary. Its business operations encompass the manufacturing of forklifts, engines, electronic components, and metal stamping tools. This indicates that Toyota Industries holds significant economic importance, a fact that its board is evidently aware of.
Toyota's Operational Challenges and Investments
On the operational front, Toyota is currently navigating a challenging period. Its most recent financial report revealed a 5.5% decrease in global production for November, totaling 821,723 vehicles. This marked the first year-on-year decline in six months. Global sales also experienced a 2.2% drop, with the Chinese market showing weakness following the government's reduction of subsidies.
Compounding these issues, Toyota has indicated that U.S. tariffs will have a substantial impact. The company estimates a reduction of 1.45 trillion yen (exceeding $9 billion) to its revenue in the current fiscal year, which concludes in March.
Despite these financial pressures, Toyota continues to make significant investments. In November, the company committed to investing $912 million across five of its manufacturing facilities located in the southern United States. This investment is part of a broader strategy to allocate up to $10 billion to its U.S. operations by the year 2030.
Toyota's European Performance and Electrification Strategy
In Europe, Toyota achieved a significant milestone by selling 1,143,963 cars in 2025, solidifying its position as the second best-selling passenger car brand across the continent. The company's electrified vehicle mix reached 77%, an increase of 5% compared to the previous year. Within this electrified segment, battery electric vehicles (BEVs) saw a 46% rise in sales, plug-in hybrid electric vehicles (PHEVs) increased by 76%, and traditional hybrid models grew by 3%.
The commercial van segment also demonstrated strong performance. The Toyota Professional light van range recorded a record 158,270 units sold, representing a 19% increase from the prior year.
Till Conrad, Head of Sales, expressed pride in the company's strong sales performance in Europe during 2025. He highlighted the continuous introduction of new and appealing models to their lineup, including the Aygo X Hybrid, the new RAV4, and the battery-electric Toyota C-HR+ and Urban Cruiser, with further product launches planned for 2026.
Toyota's commitment to electrification is evident in its sales figures. Plug-in hybrid sales reached 71,845 units, marking a 91% year-on-year increase. Battery electric vehicles sold 51,919 units, a 53% increase. Substantial growth in this area was driven by robust demand for the new C-HR plug-in hybrid model.