TOKYO: Toyota Motor Corp. said Friday that it will sell 20 pct of its shares in KDDI Corp. for about 250 billion yen, in response to the major Japanese telecom company’s offer to buy back shares at 3,900 yen per share starting Monday.

The move is part of Toyota’s efforts to reduce its cross-shareholdings to make more effective use of its assets. Proceeds from the sale of KDDI shares will be invested in growth areas such as electric vehicles.

Toyota is effectively KDDI’s second largest shareholder after Kyocera Corp. After the sale, Toyota’s equity stake will fall to about 12 pct from about 15 pct at the end of March.

“After considering our best capital relationship with KDDI, we judged that it is appropriate to sell some of our shares,” a Toyota spokesperson said.

Toyota cooperates with KDDI in the development of communications infrastructure for so-called connected cars. The spokesperson said the two companies will continue to work together.

Toyota entered the telecoms industry in the 1980s, investing in companies such as IDO Corp. It became a major shareholder in KDDI after KDDI was formed by the merger of IDO, DDI Corp. and KDD Corp.

In the previous fiscal year, Toyota sold shares in Nomura Holdings Inc. and Kansai Paint Co. to improve its capital efficiency.

JIJI Press