By Miho Uranaka
TOKYO (Reuters) – The rise in foreign takeover bids for Japanese companies is likely to accelerate, with particular attention to those undergoing significant management changes, said Yuta Komori, co-head of investment banking in Japan at Bank of America.
The acquisition spree has coincided with a growing appetite for growth among Japanese companies and a waning resistance to partnering with foreign firms, Komori said in a Sept. 3 interview about market trends, not BofA’s business strategy.
WHY IS IT IMPORTANT?
The rising number of takeover bids reflects regulators’ efforts to improve corporate governance, including new guidelines on how executives should respond to bids. It also reflects the growing attractiveness of Japanese companies, driven by a weaker yen and the unravelling of cross-shareholding arrangements.
KEY QUOTES
“Tendering activity is becoming more active regardless of the sector. From now on, it is only going to increase.”
“Just as there are options to strengthen a business domestically or go abroad and strengthen it, there are naturally options to improve corporate value by partnering with foreign companies.”
“The Japanese capital market is the most dynamic market in the world right now.”
CONTEXT
On August 19, Canada’s Alimentation Couche-Tard said it had approached 7-Eleven convenience store operator Seven & i for a possible acquisition, in what would be the largest foreign purchase of a Japanese company in history.
Other recent big deals include Blackstone’s (NYSE:) bid to buy privately held digital comics distributor Infocom and Carlyle’s acquisition of KFC Holdings Japan.
IN NUMBERS
Foreign acquisitions of Japanese companies doubled to 902.2 billion yen ($6.20 billion) in the first half of the year compared with the same period last year, LSEG data showed.
($1 = 145.4200 yen)