Recasting the auto-leasing subsidiary as a 50/50 venture with NTT (2005)

Halve the stake, add a partner

The 2005 decision was neither a sale of a business nor a purchase of one. It converted a wholly owned company with ¥28.3bn of sales into a company with some ¥66bn of sales of which it owned only half. Consolidated sales fell by ¥26.7bn and headcount by 196. On the numbers it looks like a contraction, but the fleet under management came to about 150,000 vehicles, putting the company in a top group it could not have reached alone. Asked to choose between the size of its stake and the size of the business, this company chose the business.

That the partner it chose was NTT told later. Two companies alike in resting on captive group demand placed their respective parents side by side as equal investors. The arrangement lasted eight years, until Tokyo Century Leasing took 59.5% in 2013, and over that time dealings between the two groups accumulated well beyond vehicles. Fifteen years after the merger, in 2020, NTT paid some ¥70bn to become the third-largest shareholder of Tokyo Century itself. The auto-leasing company carved out with Itochu and others in 1985 has, by changing partners, worked its way round to the shareholder register of its own parent.