Japanese insurers, banks to sell Honda shares worth $3.3 billion, filing shows By Reuters

TOKYO (Reuters) – Japanese financial groups including Tokio Marine, Sompo and two MS&AD units will sell Honda (NYSE:) Motor shares worth 535 billion yen ($3.3 billion) to unwind cross-shareholdings, a regulatory filing showed on Thursday.

Mitsubishi UFJ (NYSE:) and Mizuho, Japan’s first- and third-largest financial groups, also plan to participate in the sale, a sign that the unwinding of cross-shareholdings is catching pace as part of Japan’s corporate governance reforms.

Reuters reported the insurers’ plans earlier this week.

Cross-shareholding, or companies holding shares in each other, has long been seen as a way to reinforce business ties in Japan. But governance experts and foreign investors said it leads to lax governance by protecting management from shareholders.

The secondary share offering from a total of 10 financial institutions would come up to 300 million shares including over-allotment, with the price yet to be decided. Honda’s shares ended at 1,791 yen on Thursday, valuing the offering at about 535 billion yen.

The four non-life insurers, which include MS&AD Insurance subsidiaries Mitsui Sumitomo Insurance and Aioi Nissay Dowa, have previously said they would cut their entire cross-shareholdings to zero in a few years, in response to a price-fixing scandal last year.

Honda was one of the top five cross-shareholding companies for the insurers except for Aioi Nissay Dowa Insurance, according to securities filings in March.

($1 = 161.4100 yen)