The two largest banks in Japan, according to sources cited by Bloomberg News on Friday, will begin selling their strategic stakes in Toyota Motor valued at a combined $8.5 billion, and attempt to participate in the carmaker’s planned share buybacks.
Both Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group have stated that they intend to sell down their cross-shareholdings gradually.
The banks’ withdrawal of their ownership stakes in Toyota, one of the most prominent businesses in Japan, would be a clear example of how corporate governance reforms are spreading due to pressure from the Tokyo Stock Exchange and the government.
Cross-shareholding has long been a tactic adopted by Japanese businesses to strengthen their business relationships, but it has also come under fire for acting as a buffer between management and unfriendly or activist shareholders.
Laptops 1000Companies are now required by the nation’s governance rules to evaluate each year if the goal of cross-shareholding is reasonable.
According to Bloomberg, the banks’ Toyota assets would be disposed of over several years.
The biggest carmaker in Japan announced last month that it intended to repurchase up to 410 million shares by the end of April 2025, for a total value of 1 trillion yen ($6.4 billion).
In afternoon trading, Toyota’s stock fell 2.0% in response to the report. The shares of the banks exhibited minimal movement.
