Yamaha Corporation is selling a part of its motorcycle division
In a bid to raise money to buy back its own sharesby Sagar, on
Yamaha Corporation today announced that it will be selling 8 million shares of its holdings at Yamaha Motor Co., of which it is the largest shareholder and will remain as the largest shareholder even after this transaction goes through.
This deal will make the mother company richer by ¥26 billion ($3.9 billion) and the shares will be sold to various unnamed securities companies which will then sell them out on the open market.
The motorcycle division became independent from the main company in 1955, forming Yamaha Motor Co., Ltd, although Yamaha Corporation is still the largest shareholder at 12.21 % (42,642,790 shares).
Now, after this deal goes through, the company will be giving away 2.3% of its voting power with the powersports division and will finally hold 9.93% of Yamaha Motor Co (34,642,790 shares).
This will still make Yamaha Corporation remain as the largest single shareholder of the motorcycle division but will lose its "major shareholder" tag since it is crossing the 10% threshold required by the agreement.
Calculating costs of income tax and other expenses, the company will only get ¥18 billion ($2.8 billion). Yamaha Corporation will be making use of this amount to buy its own shares back, 7 million of it.
That means, Yamaha Corporation will regain 3.7% of the outstanding total shares (187,510,399 shares) which will cost its treasury a tune of ¥25 billion ($3.8 billion).
The reason for this acquisition was given in a press release that stated: " to provide a return to shareholders and to increase capital efficiency."
If you thought that Yamaha Moto Co. just made motorcycles, you are so wrong.
The company’s products includes motorcycles, scooters, motorized bicycles, boats, sailboats, personal watercraft, swimming pools, utility boats, fishing boats, outboard motors, 4-wheel ATVs, recreational off-road vehicles, go-kart engines, golf carts, multi-purpose engines, electrical generators, water pumps, snowmobiles, small snow throwers, automobile engines, surface mounters, intelligent machinery, industrial-use unmanned helicopters, electrical power units for wheelchairs and helmets.
Phew! That is a lot to make by just one company. Imagine Yamaha Corporation as a whole!