In a big move to make the automaker’s Toyota finance business more competitive with its rivals, the Japanese automaker announced Tuesday that it has agreed to buy a controlling stake in Toyota Motor Corporation (TM).
The deal, which will make Hyundai the world’s largest automaker by revenue, will provide Toyota with a 50% stake in the new company.
This will give Hyundai the ability to control Toyota’s financing business as well as its manufacturing, distribution and logistics operations, and will allow it to take advantage of Toyota’s global scale.
The deal is expected to close by the end of 2020, but it is possible that the deal could be extended until later.
“We’re thrilled to be a part of Hyundai Motor’s automotive growth and we look forward to building on the incredible growth of our business in the U.S.,” said Toyota CEO Akio Toyoda in a statement.
Toyota has a strong track record in finance, having invested in the business during the global financial crisis.
Hyundai Motor will continue to be the largest carmaker in the world by car sales, but the deal will allow the company to grow its automotive business even further.
In a statement, Toyota said that the new deal with Hyundai will enable the company “to further develop its financial services platform and accelerate its efforts to grow our auto business.”
Hyde is also seeking to expand its financial and supply chain capabilities.
It said the new financing and finance business will help it to increase its financial strength in the Asia-Pacific region and become a more strategic partner for other global companies, including Toyota.
There are currently about 50,000 Toyota employees in Japan.