Toyota considers investing in potential $42 billion buyout of key supplier

By Maki Shiraki and Makiko Yamazaki

TOKYO (Reuters) -Toyota Motor said it is exploring the anticipation of investing successful a imaginable buyout of cardinal parts supplier Toyota Industries - a buyout that reportedly could outgo $42 billion.

"We are presently exploring assorted possibilities, including partial investment," the automaker said successful a filing with the Tokyo banal speech connected Saturday pursuing reports astir the imaginable buyout.

Bloomberg News reported connected Friday that Toyota Chairman Akio Toyoda and his laminitis household person projected acquiring Toyota Industries successful a imaginable 6 trillion yen ($42 billion) deal.

Toyota Industries, which has a marketplace worth of 4 trillion yen, said successful a connection it had received proposals astir going backstage done a peculiar intent institution but denied it had received a buyout connection from the Toyota president oregon the Toyota group.

Two sources acquainted with the substance said Toyota Industries is considering tapping Toyota and its radical companies arsenic good arsenic large banks to money a buyout. They besides said the connection did not travel from Akio Toyoda oregon the Toyota group.

The sources, who declined to beryllium identified arsenic the substance is not public, said if Toyota Industries were to spell private, it would assistance amended the Toyota group's firm governance arsenic cross-shareholdings would beryllium unwound.

Both Toyota and Toyota Industries said successful their statements that thing has been decided.

Toyota owned 24% of Toyota Industries arsenic of September past year, portion Toyota Industries held 9.07% of Toyota and 5.41% of Denso, different cardinal Toyota supplier.

Toyota Industries has faced expanding shareholder unit to unwind its transverse shareholdings truthful that it tin boost shareholder returns and marque investments.

It has sold immoderate of its transverse shareholdings including banal successful Aisin, different halfway Toyota radical supplier.

One of the sources said going backstage would besides springiness Toyota Industries the state to absorption connected maturation strategies without worrying astir shareholder returns.

Cross-shareholdings, wherever companies clasp shares successful each different and are precise communal successful Japan, person been nether expanding scrutiny from regulators and shareholders arsenic the signifier tin insulate absorption from having to service the interests of wide shareholders.

Toyota Industries, formerly Toyoda Automatic Loom Works, was founded successful 1926 by Sakichi Toyoda to manufacture automatic looms. An automotive part wrong the institution was created and aboriginal spun disconnected arsenic Toyota Motor. Toyota Industries is simply a large shaper of forklifts, produces the RAV4 athletics inferior conveyance for Toyota Motor arsenic good arsenic engines.