Toyota Motor (TM) Soars 3.08% on $42B Acquisition Bid

On April 28, 2025, Toyota Motor's stock rose by 3.08% in pre-market trading, reflecting a surge in investor interest following a significant announcement. Toyota Motor Chairman Akio Toyoda has proposed a $42 billion acquisition of Toyota Industries Corp., a move that has sparked considerable excitement in the market. This potential acquisition, if successful, would represent a major strategic shift for Toyota, enhancing its control over key components and technologies.

Toyota Industries, a company founded by the grandfather of Akio Toyoda, has been a critical supplier to Toyota Motor, producing essential parts such as looms for textile manufacturing and components for Toyota's vehicles. The proposed acquisition, valued at 6 trillion yen, would give Toyota Motor a significant stake in its supply chain, potentially improving efficiency and innovation. This move comes at a time when Toyota is facing increasing pressure from shareholders and regulatory bodies to improve corporate governance and reduce cross-shareholdings, which are common in Japanese business practices but often criticized for their lack of transparency and accountability.

However, the acquisition proposal has also raised concerns among some investors and analysts. Kazunori Maki, a senior analyst at SMBC Nikko Securities, noted that while the acquisition could strengthen Toyota's control over its supply chain, it might also hinder ongoing efforts to improve corporate governance. The proposal has been met with mixed reactions from shareholders, with some expressing support for the move while others remain skeptical. Akio Toyoda's support rate among shareholders has declined from 96% to 72% over the past three years, reflecting growing dissatisfaction with his leadership and the company's handling of recent safety scandals and the transition to electric vehicles.