Major Japanese insurers to offload $3.1 bln of Honda shares, sources say
02/07/2024 08:47
(Adds Honda closing share price, shareholdings)
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 that could help 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, Sompo and MS&AD declined to
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.
Honda itself counted almost 50 companies in which it has
shareholdings as of March, including Renesas Electronics
6723.T , Mitsubishi UFJ Financial Group 8306.T and Tokio
Marine Holdings, shareholder filings showed.
Shares of Honda turned negative in late trade on Tuesday
following the report and ended the day down 1.45% at 1,735 yen,
after earlier rising as high as 1,801 yen.
($1 = 161.5900 yen)
(Reporting by Miho Uranaka; Additional reporting by Maki
Shiraki and Anton Bridge; Writing by Anton Bridge; Editing by
David Dolan and Christopher Cushing)
((Anton.Bridge@thomsonreuters.com;))