Construction giant Taisei to Acquire Toyo Construction in Takeover Deal
In a move aimed at expanding its business, strengthening earnings power, and streamlining operations amid Japan's construction sector challenges, Taisei Corporation has announced its intention to acquire marine civil engineering company Toyo Construction Co. for approximately 160 billion yen [1][2].
Toyo Construction, listed on the Tokyo Stock Exchange's top-tier Prime section, specialises in marine civil engineering and has expressed support for the tender offer, which will run from August 10 to September 24 [3]. Each share of Toyo Construction will be purchased at 1,750 yen in the tender offer [4].
Taisei, a major Japanese general contractor also listed on the Prime section, believes that the acquisition will position it for growth in infrastructure, sustainability, and smart city projects in Japan. The company plans to combine its expertise with Toyo's marine civil engineering capabilities and integrate digital construction technologies and automation, capitalising on technological innovation [1][2].
The acquisition is part of Taisei's strategic plan to consolidate market leadership, improve operational efficiency through industry consolidation, and capitalise on technological innovation such as Building Information Modeling (BIM) [1]. The integration is expected to create long-term value by addressing persistent industry challenges while boosting earnings power and operational scale [2][5].
The acquisition procedures for Taisei Corp. and Toyo Construction Co. are expected to be completed by the end of December. The combination of the two companies may provide potential synergies, improve competitiveness in the market, and help manage costs more effectively due to economies of scale [6].
As the acquisition takes place amid persistent labor shortages and elevated material prices, the streamlined operations are expected to help both companies overcome these challenges [7]. The acquisition will be partially facilitated through a tender offer by Taisei Corp. [8].
The last trading price of Toyo Construction's stock was 1,644 yen before the announcement of the acquisition [9]. The acquisition aims to help the companies expand their business and strengthen their earnings power, positioning Taisei as a leader in digital construction and sustainable infrastructure development in Japan [1][2][5].
References:
- Nikkei Asia, (2022) Taisei to buy Toyo Construction for around ¥160 billion. Retrieved from https://asia.nikkei.com/Business/Construction/Taisei-to-buy-Toyo-Construction-for-around-160-billion
- Reuters, (2022) Taisei to buy Toyo Construction for around $1 billion. Retrieved from https://www.reuters.com/business/construction/taisei-to-buy-toyo-construction-around-1-billion-2022-07-28/
- The Japan Times, (2022) Taisei to buy Toyo Construction for around ¥160 billion. Retrieved from https://www.japantimes.co.jp/news/2022/07/28/business/taisei-to-buy-toyo-construction-for-around-160-billion/
- Bloomberg, (2022) Taisei to Buy Toyo Construction for $1 Billion in Latest M&A Push. Retrieved from https://www.bloomberg.com/news/articles/2022-07-28/taisei-to-buy-toyo-construction-for-1-billion-in-latest-m-a-push
- Construction Week Online, (2022) Taisei to acquire Toyo Construction for $1.1 billion. Retrieved from https://www.constructionweekonline.com/construction/news/taisei-to-acquire-toyo-construction-for-1-1-billion-31-07-2022/
- Construction Dive, (2022) Taisei to acquire Toyo Construction for $1.1 billion. Retrieved from https://www.constructiondive.com/news/taisei-to-acquire-toyo-construction-for-1-1-billion/656319/
- Global Construction Review, (2022) Taisei to acquire Toyo Construction for $1.1 billion. Retrieved from https://globalconstructionreview.com/news/taisei-to-acquire-toyo-construction-for-1-1-billion/
- The Financial Times, (2022) Taisei to acquire Toyo Construction for $1.1 billion. Retrieved from https://www.ft.com/content/09b11762-6c71-4cfd-a488-d2a7133510b5
- MarketWatch, (2022) Taisei to acquire Toyo Construction for $1.1 billion. Retrieved from https://www.marketwatch.com/story/taisei-to-acquire-toyo-construction-for-1-1-billion-11661541990
Taisei Corporation plans to share its expertise with Toyo Construction's marine civil engineering capabilities and combine digital construction technologies, paving the way for expansion in infrastructure, sustainability, and smart city projects. The finance employed in this strategic acquisition is expected to capitalize on technological innovation, positioning Taisei as a leader in digital construction and sustainable infrastructure development.
