Toyota, BT Industries to link in a $890 million deal

Combination of two companies will create the world's largest manufacturer of industrial trucks with annual global sales near $3 billion.

By -- Modern Materials Handling, 5/1/2000

With a cash offer to shareholders of BT Industries AB to buy their stakes in the Mjolby, Sweden based company, Toyoda Automatic Loom Works, Ltd. (TAL) of Kariya, Japan set in motion efforts to purchase BT. The friendly merger bid will create the world's largest supplier of industrial trucks, once all the regulatory hurdles are cleared.

When the merger is complete, the combination of TAL's Toyota Industrial Equipment (TIE) and BT will have total annual sales worldwide of nearly $3 billion. Together, the two firms' revenues will easily top recent sales results for Linde. The Wiesbaden, Germany based manufacturer has held the number one position globally in lift trucks before, with world revenues of some $2.5 billion.

TAL's stock offer was unanimously backed by BT's board of directors in its recommendation to shareholders. Moreover, two firms, Nordica Invest and Bank of America Equity Partners, which together have held some 25% of BT shares, have unconditionally agreed to the offer.

The value of the total offer, announced April 4 in a Stockholm news conference, is about $890 million.

World market shares, as reported at the news conference, are Linde, 16%; NACCO (Hyster and Yale) 15%; Toyota, 13%; Jungheinrich, 10%; BT, 8%; and MCF (Mitsubishi/Cater- pillar), 8%. Merged together, Toyota and BT will have a 21% share of world forklift sales.

BT had net sales of $1.13 billion worldwide in 1999 with North America accounting for over 50% of gross income. Toyota's global sales were $1.826 billion in 1998; a more recent figure was not available.

TAL, through its TIE subsidiary, markets the Toyota brand of lift trucks, tow trucks, and related industrial trucks. BT's brands include Raymond and BT Prime-Mover, serving North American markets.

Toyota has a manufacturing relationship with BT Raymond. The latter builds some class 2 (electric motor, narrow aisle) and class 3 (electric motor, walkie/rider) trucks under the Toyota brand name.

BT's focus in its North American markets, meantime, has been on manufacturing and selling its full line of class 2 and 3 model trucks and some class 1 (electric motor, counterbalanced, rider) models. Worldwide, its products and services reach 60 countries.

Toyota offers class 1 vehicles and internal combustion trucks in classes 4 (cushion tire) and 5 (pneumatic tire) along with class 2 and 3 products.

The BT and Toyota lines are seen as essentially complementary. TAL says it will keep current U.S. brand names and sales channels for the two firms as they are now.

BT can provide Toyota, says Tadashi Ishikawa, TAL president and CEO, "with warehouse equipment products and enable us to expand our product offering in Europe and North America." He terms the merger the "perfect strategic step for our business."

Calling the merger an "ideal combination," Carl-Erik Ridderstrale, BT Industries president and CEO, says "our complimentary resources in products, distribution, and skills will form the base for additional customer value as well as long-term growth."

BT Raymond president and CEO James Malvaso adds, "Raymond achieved a leadership position in our market place. This is due to our excellent people, product, factories, and distribution. Our world class stature is a major reason Toyota sees the BT acquisition as strategically important. Plans are to leverage our capabilities enabling the new combined entity to continue its pace of growth."

"Toyota has never been more committed to the U.S. lift truck business," says Dr. Shankar Basu, TIE group vice president and general manager. "By combining two of the most respected names in the industrial equipment industry, our dealers and customers will be assured of comprehensive product lines to meet their changing needs."

TAL's stock purchase offer of SEK 275 per share (about $32 per share) represented a premium of 39% over the trading price in the 10 days prior to the announcement of the purchase in Stockholm, and a 48% premium over the share price during the prior 3 months.

The acquisition is subject to regulatory consents and clearances being granted by May 31, 2000. TAL is seeking to acquire more than 90% of the shares in BT.

did you hear?

"The Alliance of Industrial Truck Organizations, formed in 1998, is thriving. Tremendous advances have been made in standards development. We are well on the way to a world standard that will make international commerce less costly."

Larry Wuench, president, Industrial Truck Association, and executive vice president, Mitsubishi Caterpillar Forklift America.