By Daniel Leussink
TOKYO (Reuters) -Toyota Motor and two affiliates will divest at least 12.5% of supplier Aisin, the companies said, a $1 billion deal that fuelled hopes the automaker could step up sales of its cross-shareholdings.
The other sellers are Denso and Toyota Industries (OTC:TYIDF), Aisin said on Thursday. It would buy back some of its own shares on the open market, in a bid to soften the deal's impact on its stock price.
The sale price of the shares has yet to be determined, Aisin said. Reuters calculations based on its closing share price showed the deal was worth 177.5 billion yen ($1.11 billion).
The announcement follows a similar move by Toyota (NYSE:TM), Aisin and Toyota Industries in November, when they said they would sell shares in auto parts maker Denso, sparking investor hopes of further cross-shareholding reductions.
"The problem is moving closer to a resolution, though (Aisin's) stock price is likely to see an initial fall on worsening supply and demand," said Seiji Sugiura, an analyst at Tokai Tokyo Intelligence Laboratory.
The scope of Toyota's cross-shareholdings and the pace at which the world's top-selling automaker is selling those are closely watched by the market, given its influence and status in corporate Japan.
Toyota has been looking to cash in on stakes in affiliates as it steps up development and production of battery-powered vehicles. It intends to review its capital ties with other group companies on a one-by-one basis, it said in its statement.
The move to cut its stake in Aisin, which Toyota said it will reduce to 20% from 24.8% of issued shares, also comes after shareholder backing for Toyota Chairman Akio Toyoda slipped to a record low at its annual general meeting last week.
As part of the sale, Denso and Toyota Industries will sell just under 13 million shares each through a secondary offering and Toyota about 7.9 million, Aisin said in a statement.
Toyota plans to sell another 5 million shares through the offering's overallotment.
Aisin said in separate statement it would conduct a 3-1 stock split later this year.
Separately, Denso and Aisin sold off holdings in several Toyota Group companies as of the financial year that ended in March, regulatory filings showed last week.
Japanese companies traditionally took stakes in affiliates and business partners - a practice known as cross-shareholding - but have been under pressure to unwind those holdings to improve their use of capital.
The practice has drawn scrutiny from Japan's financial regulator in recent years, while investors have closely watched the unwinding of cross-held shares because they are hopeful that such moves will drive up the country's stock market.
($1 = 160.4500 yen)