Unwinding of cross-shareholdings: SMBC Group to tender Toyota shares

Sumitomo Mitsui Financial Group, Sumitomo Mitsui Banking Corporation and SMBC Nikko Securities have decided to tender a part of the common shares of TOYOTA held by SMBC Group in the tender offer for own shares by TOYOTA, which was resolved at the meeting of the Board of Directors of TOYOTA on Tuesday. If all the shares tendered by SMBC Group were purchased by TOYOTA, it would reduce the former’s holdings from 1.44% to 1.08% of TOYOTA.

Currently, SMBC Group is reallocating its business portfolio to improve capital efficiency and reducing equity holdings based on the reduction plan announced in May 2023.

Under these circumstances, SMBC Group has been engaged in thorough dialogue with TOYOTA regarding equity holdings. After that, TOYOTA made a proposal for the Tender Offer and SMBC Group decided to tender the Tender Offer as a result of comprehensive consideration of its terms and conditions.

Capital surplus, including the proceeds from the sale through the Tender Offer, will continue to be allocated in a balanced manner to shareholder returns and investment for growth, while securing financial soundness.

The SMBC Group is recognizing and discussing various issues with TOYOTA revealed through progressing the transformation from the automobile industry to the mobility industry. In this way, SMBC Group will consider and strengthen initiatives that contribute to “Japan’s Regrowth” which is one of the five priority issues of SMBC Group, such as supporting customers’ business model transformation, creating innovation and new industries.

If the shares to be tendered by SMBC Group are purchased by TOYOTA, the number of shares of TOYOTA held by SMBC Group will decrease, but TOYOTA and SMBC Group believe that they can maintain a good relationship going forward.

In addition, to enhance corporate value and realize an era of “Fulfilled growth”, SMBC Group and TOYOTA will continue to co-create, leveraging the strengths of both companies.

The figure for the number of shares held after the Tender Offer represents the number of shares to be held if the Tender Offer is carried out as planned and all 48,668,475 common shares of TOYOTA held by SMBC Group are purchased by TOYOTA through the Tender Offer.

However, because the upper limit for the shares to be purchased by TOYOTA through the Tender Offer is 290,122,345 and other companies may also tender their shares, all 48,668,475 common shares that SMBC Group tenders to sell might not be able to be purchased by TOYOTA.

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