(Alliance News) - Toyota Motor Corp and Subaru Corp on Friday agreed a new business and capital alliance, with both companies to increase their equity stakes in each other.
Toyota is to buy sufficient shares to raise its voting rights share in Subaru to 20% from 16.8%. Based on March 31 figures, that would be 24.3 million Subaru shares or a 3.2% stake increase. It is foreseen that Subaru will "become an affiliated company of Toyota".
Subaru, in turn, would buy shares equivalent to the monetary amount necessary for Toyota to buy the Subaru shares - with a maximum value of JPY80 billion or about USD742 million.
Based on the Friday closing price of Subaru shares in Japan of JPY3,105, 24.5 million shares would be worth around JPY76.07 billion, around USD705 million.
Subaru closed down 0.7% on Friday, while Toyota Motor closed down 0.8% at JPY7,369.
The two companies have an existing partnership, which "has included contract production by Subaru of Toyota vehicles and supply by Toyota of vehicles to Subaru, as well as joint development of the rear-wheel-drive Toyota 86 and Subaru BRZ sports car models."
Under the new alliance, Subaru and Toyota will jointly develop all-wheel drive models and the next generation Toyota 86 and Subaru BRZ. Moreover, the use of the Toyota Hybrid System will be expanded into more Subaru models and the two will cooperate on autonomous driving.
Toyota President Akio Toyoda said: "During this once-in-a-century period of profound transformation, even if [connected, autonomous/automated, shared, and electric] changes how cars will be, driving enjoyment will remain an inherent part of automobiles and is something that I think we must continue to strongly preserve.
"I, myself, am a rallyist, and, through my experience of training hard in an Impreza, I have felt in my veins the wonders of Subaru's AWD technologies. Meanwhile, we at Toyota have been going all out to hone our all-wheel-drive technologies by participating in the World Rally Championship, among other activities. Our companies, both of which have long pursued driving enjoyment, now want to pursue the possibilities of making ever-better cars suitable for the CASE era by bringing together our strengths and by further deepening our relationship."
By Anna Farley; annafarley@alliancenews.com
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