Governance Crossroads: A Turning Point for Toyota Industries Corporation

In this client update, GMO’s Usonian Japan Equity team assesses the implications of a potential take-private transaction of Toyota Industries Corporation (TIC) and calls for improved governance standards in Japan's capital markets.

Key insights:

• TIC’s persistent undervaluation (trading at 0.66x price-to-book) is linked to inefficient governance and Toyota Group cross-shareholdings.

• Recent reports of a potential buyout by Toyota Motor Co. sparked a market rally, confirming governance concerns as a key valuation drag.

Read the full letter to explore why this moment could set a vital precedent for Japanese corporate governance reform.