Toy­ota buy­ing Dai­hatsu in stock swap

The Pak Banker - - 6BUSINESS -

TOKYO: Toy­ota Mo­tor Corp. will buy out its Dai­hatsu Mo­tor Co. unit through a stock swap, mak­ing a key unit for small cars sold in South­east Asia and Ja­pan a wholly-owned sub­sidiary. The world's largest au­tomaker will of­fer 0.26 shares for each share of Dai­hatsu in an ex­change of shares sched­uled to take ef­fect Aug. 1, ac­cord­ing to a state­ment. Dai­hatsu will stop trad­ing on July 26 and de-list the fol­low­ing day.

Toy­ota is forg­ing closer ties with its Ja­panese peers as au­tomak­ers face ris­ing costs of meet­ing tougher en­vi­ron­men­tal stan­dards and the chal­lenge of nav­i­gat­ing slower global sales growth. The car­maker said last year it would deepen col­lab­o­ra­tion with Mazda Mo­tor Corp., and it's re­port­edly con­sid­er­ing an al­liance with Suzuki Mo­tor Corp.

Al­though Toy­ota was the only au­tomaker to sell more than 10 mil­lion ve­hi­cles world­wide last year, its de­liv­er­ies slipped 0.8 per­cent to 10.15 mil­lion. Sales for Ger­man ri­val Volk­swa­gen AG fell 2 per­cent and Gen­eral Mo­tors Co. eked out a 0.2 per­cent in­crease, un­der­scor­ing the slower pace of growth for the global in­dus­try that's ex­panded ev­ery year since 2009.

Dai­hatsu strug­gled last year, with sales slump­ing 13 per­cent to 794,000 ve­hi­cles. The leader in Ja­pan's minicar seg­ment saw do­mes­tic de­liv­er­ies de­cline 14 per­cent, af­ter a price war with Suzuki for sales lead­er­ship dur­ing the last fis­cal year pulled ahead de­mand.

The small-car maker also has been slump­ing in In­done­sia, with de­liv­er­ies drop­ping 10 per­cent through the first half of its fis­cal year. Dai­hatsu builds ve­hi­cles for Toy­ota in In­done­sia, where its share of in­dus­try­wide pro­duc­tion was about 39 per­cent in the last fis­cal year.

Toy­ota may not be done in spurring more con­sol­i­da­tion within Ja­pan's auto in­dus­try. The car­maker is study­ing a po­ten­tial part­ner­ship with Suzuki, the Nikkei news­pa­per re­ported Thurs­day, a day af­ter the two com­pa­nies de­nied be­ing in talks.

Toy­ota also owns a ma­jor­ity of truck maker Hino Mo­tors Ltd. and has mi­nor­ity stakes in Subaru maker Fuji Heavy In­dus­tries Ltd. and truck maker Isuzu Mo­tors Ltd.

Dai­hatsu traces its be­gin­nings to March 1907, when two academics and a group of busi­ness­men set up a com­pany in Osaka, Ja­pan's se­cond-largest city, to pro­duce in­ter­nal com­bus­tion en­gines. Toy­ota first tied up with Dai­hatsu in 1967, has owned its ma­jor­ity stake since 1998 and has been sup­plied Toy­otabranded mini­cars since 2011.

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