Denso to sell off cross-shareholdings and use proceeds on M&A

JTEKT

26/04/2024 11:15

TOKYO, April 26 (Reuters) - Toyota Motor  7203.T 
supplier Denso  6902.T  plans to eventually sell all of its
cross-shareholdings, its president said on Friday, as the
company looks to fund acquisitions and other investments.
    
    WHY IT'S IMPORTANT
    Investors have long pressured Japanese companies to sell-off
cross-shareholdings and put their capital to better use. Firms
have been gradually selling down their stakes, thanks in part to
a governance push by the Tokyo Stock Exchange and the
government.
    Toyota and some other of its group companies last year sold
around 8% of Denso, a move that was seen as a critical first
step by the sprawling Toyota Group and heightening expectation
of more sales to come.
    
    CONTEXT
    * Denso President Shinnosuke Hayashi told a briefing the
supplier of auto components will continue selling its
cross-shareholdings, with the intent to sell all of them, after
holding talks with the companies involved.
    * Denso, which doesn't disclose the size of its
cross-shareholdings, in March announced plans to sell all of its
9.1% stake in Toyota Industries  6201.T . 
    * It has also cut holdings in JTEKT  6473.T , another group
company.
    
    KEY QUOTES
    "Basically, we are not going to hold a portion of the
shares, but rather we are moving towards selling all of our
shares," Executive Vice President Yasushi Matsui told the
briefing.
    * Hayashi said the elimination of cross-shareholdings was
important for increasing the competitiveness of the entire
industry.
    
    BY THE NUMBERS
    * Denso reported a 11% decline in full-year operating profit
on Friday.
    * It forecast an 88% profit increase for the year to March,
for 714 billion yen ($4.6 billion).
    ($1 = 156.6300 yen)