Toyota, Suzuki Motor enter into capital alliance agreement

Our Bureau New Delhi | Updated on September 26, 2019

The two companies team up to take on new challenges the industry faces

Toyota Motor Corporation (Toyota) and Suzuki Motor Corporation (Suzuki) on Wednesday have announced that the two companies entered into an agreement regarding a capital alliance (the Alliance). This is to establish and promote a long-term partnership between the two companies forcollaboration in new fields, including autonomous driving.

In a statement, they plan to acquire each other’s shares based on the Alliance.

Toyota plans to acquire 24,000,000 shares of common stock in Suzuki (4.94 per cent ownership of the total number of shares issued by Suzuki as of March 31, 2019 (excluding treasury shares) with a total value of 96 billion Japanese Yen) by underwriting the disposition of treasury shares by way of third-party allotment conducted by Suzuki, it said.

“Likewise, Suzuki plans to acquire, through purchase in the market, shares in Toyota equivalent to 48 billion Japanese Yen. These share acquisitions will be implemented after the companies obtain approvals from the foreign competition authorities,” the company said.

The two companies began considering the business partnership on October 12, 2016. Since then, they have continued to consider specific details. On March 20, 2019, the companies had announced that they would begin specific considerations in order to engage in joint product development and collaboration in production. This is in addition to promoting the mutual supply of products, by bringing together Toyota’s strength in electrification technologies and Suzuki’s strength in technologies for compact vehicles.

The automobile sector is currently experiencing a turning point unprecedented in both scope and scale, not only because of enhanced environmental regulations, but also from new entries from distinct industries and diversified mobility businesses, Suzuki said in a statement.

“The two companies intend to achieve sustainable growth, by overcoming new challenges surrounding the automobile sector by building and deepening cooperative relationships in new fields while continuing to be competitors, in addition to strengthening the technologies and products in which each company specialises and their existing business foundations,” it said.

The two companies plan to establish and promote a long-term partnership to promote collaboration in new fields like autonomous driving.

The execution of the capital alliance agreement is a confirmation and expression of the outcome of sincere and careful discussions between the two companies, and it will serve for building and promoting their future partnership in new fields, it added.

Published on August 28, 2019

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