Toyota increased Subaru’s share to more than 20%September 27, 2019
Toyota plans to increase its stake in Subaru from 17% to more than 20%. The deal will allow Subaru to invest in Japan’s largest automaker.
Toyota’s investment is likely to cost more than 70 billion yen ($ 650 million) based on the value of Subaru shares. Subaru is likely to reciprocate with a stake in Toyota, which will be approximately equal to the value of Toyota’s additional investment.
Subaru has extensive experience in the development of SUVs and four-wheel drive technologies. Both automakers said in June that they plan to jointly develop an electric SUV on a jointly created platform.
Note that Toyota in 2018 produced 10.6 million cars and trucks, while Subaru only 1 million cars, which is 5% lower, and the decline is observed for the first time in seven years. Toyota plans to make Subaru a joint-stock partner after increasing its stake, which will make it more profitable.
“The plan, apparently, is to ultimately make Subaru a wholly owned subsidiary. Toyota Group is considering various options to increase its competitiveness. ”Said Toyota spokesman Maki Nimi.
Toyota seems to be striving to scale up, invest in smaller companies. He has been building his holding in Subaru since the first acquisition of a 9.5 percent stake in 2005. Toyota is keen to scale up next-generation technologies and said it will provide free access to patents for electric motors and power control units this year.
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