Toyota Motor Corporation and Suzuki Motor Corporation have agreed to buy stakes in each other in order to establish a long-term partnership.
Last year, the two companies began discussing new joint projects that would see Toyota providing Suzuki with powertrain development support, while Suzuki helped Toyota get a foothold in the Indian market.
The new agreement will see the two collaborate in new fields, including autonomous driving.
On March 20 of this year, the companies announced that they would begin specific considerations in order to engage in joint product development and collaboration in production, 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.
As part of this agreement, Suzuki will launch two Toyota-based models next year based on the Corolla and RAV4.
While the automobile sector experiences 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 and Toyota 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.
In order to develop and promote a long-term partnership between the two companies, the companies 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% ownership of the total number of shares issued by Suzuki as of March 31, 2019 (excluding treasury shares) with a total value of JPY 96 billion) by underwriting the disposition of treasury shares by way of third-party allotment conducted by Suzuki.
Likewise, Suzuki plans to acquire, through purchase in the market, shares in Toyota equivalent to JPY 48 billion.
These share acquisitions will be implemented after the companies obtain approvals from the foreign competition authorities.