Toyota Subsidiary Acquires Radius Recycling in $907M Deal

Key Facts and Data Points

• Deal Value: Toyota Tsusho agreed to acquire Radius Recycling for approximately $907 million.
• Completion Timeline: The transaction is expected to close by the third quarter of 2025.
• Radius Recycling Metrics (2024):
  • Processed 4.5 million long tons of ferrous recycled metal.
  • Processed 334,000 long tons of nonferrous recycled metal.
• Revenue: Radius reported revenue of $2.74 billion in August 2024, down from a peak of $3.49 billion two years prior.
• Stock Price Premium: The deal represents a 115% premium over Radius' stock price as of March 12, 2025, which was $30 per share.

Market Trends and Business Impact

• Sustainability Focus: Toyota Tsusho aims to expand its closed-loop recycling system for materials like steel, precious metals, and batteries. This aligns with global trends toward sustainable manufacturing and resource efficiency.
• Green Steel Production: The acquisition will enhance Toyota's ability to supply "green steel" made from recycled metal to automotive manufacturers.
• Battery Recycling Expansion: Toyota plans to increase its collection of precious metals from catalytic converters and establish a closed-loop recycling platform for batteries, addressing growing demand for sustainable battery materials.

Competitive Dynamics

• Radius' Position: Radius is the second-largest independent recycler in the U.S., with expertise in end-of-life vehicle recycling and metal scrap processing.
• Strategic Synergies: Toyota Tsusho expects to leverage Radius' collection network to strengthen its recycling capabilities, potentially gaining a competitive edge in the North American market.

Financial and Regulatory Implications

• Premium Investment: The $907 million purchase reflects Toyota's commitment to expanding its recycling operations, signaling long-term strategic importance for sustainability initiatives.
• Tariff Mitigation: The deal may help mitigate rising material costs driven by tariffs on steel and other metals, providing a more stable supply chain for automotive manufacturers.

Long-Term Effects

• Sustainability Goals: Toyota Tsusho aims to reduce reliance on virgin materials, aligning with broader industry trends toward circular economy practices.
• Supply Chain Resilience: By integrating Radius' recycling capabilities, Toyota can enhance its ability to recover and reuse materials, potentially reducing costs and improving supply chain resilience.

Strategic Considerations

• Collaboration Benefits: Toyota Tsusho highlights the alignment of Radius' expertise with its own sustainability goals, positioning the combined entity as a leader in automotive recycling and material recovery.
• Market Expansion: The acquisition positions Toyota to expand its recycling operations in North America, reinforcing its presence in one of the world's largest automotive markets.

This deal underscores Toyota's strategic focus on sustainability and resource efficiency, with potential long-term benefits for both its business and the broader automotive industry.