BY COMFORT OGBONNA
Nintendo is planning a major unwinding of strategic cross-shareholdings that would involve key financial institutions, including MUFG Bank and Bank of Kyoto, selling down their stakes in the “Super Mario” maker, according to three sources familiar with the matter.
The total value of the share sale is expected to reach roughly 300 billion yen (about $1.9 billion). Two of the sources said the Kyoto-based gaming giant could make a formal decision as soon as Friday. In tandem with the planned sell-down, Nintendo is also preparing a share buyback, a move that could help cushion the impact of the sales on its stock price and signal confidence in its long-term prospects.
Nintendo did not respond to requests for comment. The sources declined to be identified because the information has not yet been made public.
Following reports of the planned restructuring, Nintendo’s shares pared earlier gains but remained up 2.4% in afternoon trading, suggesting investors viewed the move as broadly constructive.
Both MUFG Bank and Bank of Kyoto have previously outlined policies aimed at reducing cross-shareholdings, part of a broader shift in Japan’s corporate governance landscape. In 2019, the two lenders and other stakeholders participated in a sale of Nintendo shares totaling approximately 71 billion yen, reflecting gradual efforts to unwind such ties.
As of September last year, Bank of Kyoto held a 4.19% stake in Nintendo, while MUFG Bank — Japan’s largest bank and a core unit of Mitsubishi UFJ Financial Group — controlled a 3.62% stake through a trust bank. Mitsubishi UFJ Financial Group declined to comment, and Kyoto Financial Group, the parent company of Bank of Kyoto, did not respond to requests for comment. Shares of Kyoto Financial Group surged 9% following the news.
The planned move comes amid mounting pressure from regulators and the Tokyo Stock Exchange for Japanese companies to unwind cross-shareholdings. The practice, which involves companies holding shares in one another to solidify long-term business relationships, has long been a hallmark of Japan’s corporate system. However, governance experts and overseas investors have criticized it for insulating management from shareholder accountability and distorting capital allocation decisions.
Momentum for reform has accelerated in recent years as Japanese authorities push for improved transparency, higher returns on equity, and stronger alignment with global governance standards. Reducing cross-shareholdings is seen as a critical step toward enhancing market efficiency and boosting investor confidence.
Nintendo’s potential restructuring mirrors similar moves by other major Japanese corporations. Toyota is also planning an unwinding of strategic shareholdings that could involve banks and insurers selling around $19 billion worth of its shares, according to a report published Thursday. Such transactions signal a broader transformation in Japan’s corporate culture, where longstanding reciprocal ownership arrangements are gradually being dismantled.
While cross-shareholding has been common in Japan for decades, particularly among banks and industrial firms, it is far less prevalent in Western markets. The ongoing shift suggests Japan’s corporate sector is entering a new phase, prioritizing shareholder returns and governance reforms over traditional business alliances.
If finalized, Nintendo’s planned share sale and buyback would represent one of the largest such moves in the country’s gaming industry, potentially reshaping its shareholder base and aligning it more closely with global market practices.
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