Toyota plans $19 billion share sale in major Japan governance reform move

Japan’s auto giant Toyota Motor Corporation is preparing a large-scale unwinding of strategic cross-shareholdings that could see banks and insurers sell about $19 billion (around 3 trillion yen) worth of its shares, according to sources. | Photo Credit: FRANCIS MASCARENHAS

Toyota plans a large-scale unwinding of strategic shareholdings that ​would involve banks and insurance firms selling around $19 billion ⁠of its shares, two sources said, in what would mark a watershed moment in Japan's corporate governance reform.

The sale will likely total around 3 trillion yen ($19 billion) ‌but could be larger depending on the willingness of shareholders to sell, the sources said. Toyota aims for the sale to ‌happen as early as this year, although the timing ‌and ⁠scale could change depending on shareholders - or the plan could ⁠be abandoned, one of the sources said.

Reuters is reporting Toyota's preparations for the first time. Toyota declined to comment. The sources declined to be identified because the information is not ​public.

Toyota's shares extended gains ‌following Reuters' report. They were up around 2% in early afternoon trade, outperforming the broader market.

Toyota aims to acquire shares through buybacks, the sources said. A secondary sale to other investors has also emerged ‌as an option, one of the sources said.

The move by the ​world's largest automaker would be evidence of the scale of Japan's on-going corporate governance reform. Regulators and the Tokyo ⁠Stock Exchange have been encouraging Japanese companies to unwind their cross-shareholdings.

The practice, which involves firms holding shares in each other to cement business ties, ‌has long been criticised by governance experts and overseas investors as insulating management from shareholders. Although widespread in Japan for decades, it has been less common in the West.

While Toyota has a policy to cut its cross-shareholdings, it has also come under fire over governance and has faced calls from investors to improve capital efficiency.

Toyota wants to demonstrate its ‌seriousness about governance reform by unwinding the strategic shares, one of the sources said.

The ​automaker is in the midst of a tender offer for forklift maker Toyota Industries. Activist investor Elliott opposes the deal, arguing ⁠it is underpriced and lacks transparency. Toyota has extended the tender offer ⁠to March 2 due to insufficient shareholder support.

Toyota shareholders include banks such as Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial ‌Group and insurers such as MS&AD Insurance Group.

Japanese banks and insurers have in recent years outlined policies to reduce their cross-shareholdings.

Published on February 26, 2026