Toyota Tshusho Bids $2 Billion for Remaining 70% of CFAO

Toyota Tsusho Corp. (8015), the trading arm of Japan’s largest carmaker, offered 1.62 billion euros ($2 billion) to buy the remaining 70 percent of auto and drugs distributor CFAO SA (CFAO) to expand its business in Africa.

Toyota Tsusho plans to buy shares for 37.50 euros apiece through a public offer, the Nagoya, Japan-based company said in a statement. The price, which is 1.6 percent higher than CFAO’s latest close, matches the bid it made to buy a stake held by France’s PPR SA (PP) last month. The companies said at the time Toyota Tsusho was considering a general offer.

The deal, Toyota Tsusho’s biggest acquisition since its purchase of Tomen Corp. in 2005, would pave the way for the Japanese company to reduce its reliance on autos and expand its business in Africa. The sale gives Paris-based PPR, owner of the Gucci luxury brand, an exit from assets that don’t fit its strategy to focus on sporting and luxury goods.

“This is a good price, but not a very generous one,” said Virginie Blin, an analyst at AlphaValue with an add recommendation on CFAO. “They’d have to offer a little more. The risk is that everyone might not accept the deal at this price.” Blin said she valued CFAO at 41 euros per share.

Toyota Tsusho, which counts Toyota Motor Corp. (7203) as its biggest shareholder, fell 1.2 percent to 1,601 yen at the close of trading in Tokyo before the announcement. CFAO rose 1.5 percent to 37.46 euros as of 11:24 a.m. in Paris trading. PPR fell 0.8 percent to 125.35 euros.

Reducing Autos

CFAO distributes goods ranging from trucks to pharmaceuticals in 34 countries, mainly in Africa and French Overseas Territories. The company generated revenue of 3.1 billion euros in 2011.

“The company will now have access to the whole African continent,” Jiro Iokibe, a Tokyo-based analyst at Daiwa Securities Group Inc. (8601), said by phone. “The acquisition will also help Toyota Tsusho expand its business away from autos.”

Toyota Tsusho, which generated 64 percent of its profit in the last fiscal year from auto-related businesses, has forecast it will reduce the proportion to 50 percent by March 2017.

PPR, which on Aug. 2 completed its 688 million euro sale of a 30 percent stake in CFAO to Toyota Tsusho, agreed to unload its remaining 12 percent holding to the Japanese company, according to the statement. Toyota Tsusho said earlier this month it registered to sell as much as 200 billion yen ($2.55 billion) in bonds.

To contact the reporter on this story: Anna Mukai in Tokyo at

To contact the editor responsible for this story: Young-Sam Cho at

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