Toyota Motor Corporation (TMC) and Suzuki Motor Corporation are strengthening their relationships with an agreement which involves a capital alliance. The two companies began considering such a business partnership in October 2016 and since then, have continued to explore and discuss specific details.
On March 20 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.
Now, with an Alliance, there can be a long-term partnership between TMC and Suzuki for promoting collaboration in new fields, including the field of autonomous driving. This is vital as 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 execution of the capital alliance agreement is a confirmation and expression of the outcome of sincere and careful discussions between TMC and Suzuki, and it will serve for building and promoting their future partnership in new fields.”
Joint statement by the two companies
Cooperating in new fields but still competitors
Both 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.
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 96 billion yen) 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 yen.
