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Major Japanese Trading House Merger

Japanese trading houses Toyota Tsusho Corp. and Tomen Corp. have plans to merge in April next year, according to reports. Both houses are divisions of auto manufacturer Toyota Motor. The merger will lead to the creation of sixth-largest trading firm in Japan. The new company will have combined sales of 4.9 trillion yen, or $43 billion dollars.

Toyota Tsusho generates about 70 percent of its sales from automobiles. According to reports, the merger ratio will be decided after Tomen settles its negotiations with UFJ Bank Ltd. and other lenders on the treatment of the approximately 72 billion yen in preferred shares it has issued to these creditors.

According to media reports, the company is likely to assume a key role in Toyota Motor`s global business strategy. After the merger, Toyota Tsusho will be the only surviving entity, reports Japanese business daily Nihon Keizai Shimbun.