Toyota Motor Corp. (TM) Chairman Akio Toyoda has proposed a $42 billion buyout of Toyota Industries Corp., aiming to consolidate control over Japan’s largest business empire amid a wave of domestic merger and acquisition (M&A) activity, according to sources familiar with the matter.

The buyout proposal values Toyota Industries — a maker of looms and auto parts — at approximately ¥6 trillion ($42 billion), representing a 40% premium over its last market capitalization. The company has formed a special review committee and hired advisers to assess the bid’s feasibility.

While Toyoda owns less than 1% of Toyota Motor directly, Toyota Industries holds a 9.1% stake in the automaker. A successful acquisition would greatly strengthen Akio Toyoda’s influence over the broader Toyota Group, which spans automotive, real estate, and other industries.

Key Points:

• Toyota Industries was founded by Sakichi Toyoda, Akio’s great-grandfather, 135 years ago, and remains central to the Toyoda family legacy.

• A final decision has not yet been made; both Toyota Motor and Toyota Industries stated they are reviewing “all possibilities.”

• Financing would reportedly include Toyoda’s personal investment and loans from Japan’s megabanks, such as Mitsubishi UFJ Financial Group Inc.

• This move comes amid increased regulatory scrutiny in Japan, encouraging firms to unwind cross-shareholdings and strengthen corporate governance.

If completed, the deal would rank among the largest global buyouts in history, reshaping the structure of one of the world’s most influential automotive groups.

Background Context:

• Toyota Motor remains the world’s largest car manufacturer by sales, with a market value of ¥42.5 trillion, second only to Tesla.

• Recent years have seen waning shareholder support for Akio Toyoda’s leadership, partly due to vehicle safety scandals.

• Despite criticisms, Toyoda’s multi-pathway approach — investing in hybrids, hydrogen, and EVs — has reinforced Toyota’s industry dominance amid a global EV slowdown.