Major Japanese insurers to offload $3.1 bln of Honda shares, sources say
02/07/2024 06:55
(Adds details on cross-shareholdings, insurers, stock price)
By Miho Uranaka
TOKYO, July 2 (Reuters) - Four of Japan's top property
and casualty insurers and other financial firms plan to sell
around 500 billion yen ($3.1 billion) of shares in Honda Motor
7267.T , three people said, as the unwinding of
cross-shareholding practices accelerates.
Tokio Marine Holdings 8766.T Sompo Holdings 8630.T and
two units of MS&AD Insurance Group 8725.T will together
offload shares in the automaker, said the people, who declined
to be identified because the information has not been made
public.
Other financial institutions will also pare back their Honda
stakes, bringing the total sale to around 500 billion yen based
on Honda's current share price, the sources said.
Honda is set to soon formally give the insurers the go-ahead
to sell its shares, the sources said.
The automaker has already announced plans to buy back up
to 300 billion yen of its shares during the current financial
year, a move seen as helping absorb some of the impact from the
sale.
Honda declined to comment on the insurers' sale, saying only
that the information was not something it itself had announced.
Spokespeople for Tokio Marine and MS&AD declined to comment.
Sompo did not immediately respond to a request for comment.
The four firms, which include MS&AD units Mitsui
Sumitomo Insurance and Aioi Nissay Dowa Insurance, have
previously said they would bring all cross shareholding
arrangements to zero.
Honda is one of the top five cross-shareholding
companies for the insurers except for Aioi Nissay Dowa
Insurance, according to securities filings as of March.
The sale of shares of a high-profile company, in which
the insurers have notable stakes, is the latest sign that the
unwinding of cross-shareholding is gaining pace in Japan.
Cross-shareholding, or companies holding shares in each
other, was long seen as a way to cement business ties. However,
governance experts and foreign investors have said it protects
management from shareholders, leading to lax governance.
The four insurers, or their parents, held more than 300
billion yen of Honda shares as of March, with Tokio Marine at
161 billion yen, Sompo Japan at 81 billion, Mitsui Sumitomo at
73 billion and Aioi Nissay at 2.8 billion, securities filings
showed.
In total, the four held some 9 trillion yen worth of
cross shareholdings as of March, with Toyota Motor 7203.T ,
Shin-etsu Chemical 4063.T and Itochu 8001.T among the top
names, the filings showed.
In December, the four insurers were handed a business
improvement order by Japan's Financial Services Agency after
they were found to have fixed the prices of their corporate
insurance fees. The regulator told them to reduce their
cross-shareholdings.
Shares of Honda turned negative in late trade on Tuesday
following the report. Shares were down 1.7% at 1,727 yen, after
earlier rising as high as 1,801 yen.
($1 = 161.5900 yen)
(Reporting by Miho Uranaka; Additional reporting by Maki
Shiraki; Writing by Anton Bridge; Editing by David Dolan and
Christopher Cushing)
((Anton.Bridge@thomsonreuters.com;))