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Wednesday October 5, 4:18 PM
Toyota to buy 10pct of Fuji Heavy-reportTOKYO (Reuters) - Toyota Motor Corp. will buy a 10 percent stake in fellow Japanese auto maker Fuji Heavy Industries Ltd. from U.S. rival General Motors Corp. to become its top shareholder, Japanese media reported on Wednesday. GM owns 20 percent of Fuji Heavy, the maker of Subaru cars. Fuji Heavy President Kyoji Takenaka and Toyota Executive Vice President Mitsuo Kinoshita are scheduled to attend the briefing. Dogged by huge pension and health-care liabilities, as well as sliding U.S. sales, GM has to been struggling to repair its operations and balance sheet amid cut-throat competition in the auto sector. The U.S. auto maker could use the cash as financing becomes more expensive following the downgrade of its debt to junk status this year by three top ratings agencies. GM bought its stake in Fuji Heavy, which is known for its edge in all-wheel-drive technology, in December 1999, but analysts have recently questioned the value of that alliance as Subaru battles its own drop in sales. Fuji Heavy recently began building a Saab model on an original equipment manufacturing (OEM) basis for GM, but their cooperation beyond that is limited to some joint parts procurement and collaboration on research and development. If Toyota buys the 10 percent stake, the deal would be valued at around 42.3 billion yen based on Fuji Heavy's closing share price of 540 yen on Wednesday. Fuji Heavy has 782.87 million shares outstanding. GM also owns one-fifth of Japanese minivehicle maker Suzuki Motor Corp. and about 8 percent of truck maker Isuzu Motors Ltd. . Toyota has capital alliances with Japanese minivehicle maker Daihatsu Motor Co. and truck maker Hino Motors Ltd. , which are both majority-owned.
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