Toyota and Suzuki enter into capital alliance agreement; collaboration to focus on new fields such as autonomous driving
Toyota Motor Corporation and Suzuki Motor Corporation entered into a capital alliance agreement to establish and promote a long-term partnership between the two companies for promoting collaboration in new fields, including the field of autonomous driving.
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 31 March 2019 (excluding treasury shares) with a total value of JPY 96 billion, or US$905 million) 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 (US$453 million). These share acquisitions will be implemented after the companies obtain approvals from the foreign competition authorities.
The two companies began considering a business partnership in October 2016, and since then have continued to consider specific details. On 20 March 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.
The two companies noted that the automobile sector is currently experiencing 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.
The two companies 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 specializes and their existing business foundations.
Specifically, to take up challenges together in this transitional era, the two companies plan to establish and promote a long-term partnership between the two companies for promoting collaboration in new fields, including the field of autonomous driving.