Toyota Motor will buy back ?806.8 billion ($5.2 billion) worth of its stock from major Japanese banks and insurers as part of a broader push to unwind strategic shareholdings with financial partners.

Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, Tokio Marine Holdings and MS&AD Insurance Group Holdings are tendering their shares at ?2,781 apiece, an 11% discount to their closing price on Tuesday, Toyota has said in a statement.

The buybacks are part of a ?1 trillion repurchase plan announced by Toyota in May, and are also aimed at satisfying the Japanese government¡¯s push to get big enterprises to unwind cross-held shareholdings forged over decades to cement business relationships. While that has brought some measure of accountability for management and improved governance, the biggest banks and businesses had been slow to unwind their holdings. Given its scale and significance, the Toyota deal could trigger a broader wave of looser equity ties in Japan.

¡°For shareholders, it¡¯s good news,¡± said Seiji Sugiura, a senior analyst for Tokai Tokyo Intelligence Laboratory. ¡°Everyone has been waiting ever since Toyota announced its buyback.¡±

For Toyota, the goal is to increase shareholder returns and free up funds to invest in efforts to become carbon neutral, the company said in a statement Tuesday.

In June, Mitsubishi and Sumitomo were planning to start divesting their stakes in Toyota, worth ?1.32 trillion. In addition to MS&AD Insurance and Tokio Marine, Sompo Holdings holds a significant stake in Toyota. If all of them were to divest shares, the total value would top ?3 trillion.

The banks and insurers are said to be planning to divest their Toyota shareholdings over an extended period of time lasting a few years, dramatically reducing their stakes or divesting them entirely.

The sale follows a banner year for Toyota, which has seen shares climb 26% this year on top of a 43% rally in 2023.

Some Japanese insurers have already hinted at plans to significantly reduce or eliminate their cross-shareholdings, which authorities believe are a cause of price fixing with corporate clients.

Toyota is also looking to unwind its shares in its various business partners. Earlier this year, the carmaker announced plans to sell part of its stake in parts suppliers Aisin and Denso, and Toyota Industries also said they would unwind their holdings in Aisin.

In November, the carmaker said it would reduce its stake in electric parts maker Denso to 20% from 24%. Prior to that, Toyota committed to selling some of its stake in telecommunications company KDDI for ?250 billion.

While the sales serve the purpose of freeing up money that can be used to fund Toyota¡¯s shift to electric vehicles, it can also be put toward buybacks.