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Japan firms’ M&A boom likely to continue in ’19
BloombergTOKYO (Bloomberg) — Japan outmuscled China to dominate mergers and acquisitions in Asia last year, and with companies in possession of more than $890 billion in cash, the spending spree is likely to continue in 2019.
Japanese companies announced more than 1,000 offshore acquisitions totaling a record $191 billion last year, led by Takeda Pharmaceutical Co.’s blockbuster takeover of Shire Plc, according to data compiled by Bloomberg. The last time Japan overtook China by that measure was in 2012.
Faced with a shrinking population and stagnant economy, Japanese businesses have been increasingly looking overseas as trade-war tensions depress stock prices and bolster the value of the safe-haven yen. Combine that with the massive war chest that Japanese firms from SoftBank Group Corp. to Toshiba Corp. have amassed, and bankers are preparing for a prosperous year.
Japanese companies are poised to have the “biggest year ever” in terms of the number of offshore deals, Koichiro Doi, JPMorgan Chase & Co.’s Japan M&A head, said in an interview. The U.S. will be the most sought-after destination, partly because it’s the largest market that’s growing, according to Doi, who said 2018 was the busiest year he’s had in his two-decade-long career.
The number of purchases is bound to increase from industrial, consumer and technology firms, but Japan Inc. is unlikely to spend as much in aggregate, or pull off a deal the size of Takeda’s this year, Doi said. Takeda’s purchase of Shire, scheduled for completion this week, was the world’s largest takeover announced last year. This year, an even bigger deal may be in the offing with Bristol-Myers Squibb’s recent agreement to acquire Celgene Corp.
Japanese businesses have long been looking to expand overseas through acquisitions but their track record, in terms of M&A prowess, hasn’t been too flattering.
In the 80s, as soaring stock prices fueled hubris, Japan Inc. snapped up everything from the iconic Rockefeller Center in Manhattan to California’s Pebble Beach golf course and Vincent Van Gogh’s Sunflowers painting. Sony Corp. and Panasonic Corp. bought Hollywood studios. Many of those investments ended up being sold at a fraction of their cost after the country’s asset bubble burst.
Then there were the acquisitive years at the turn of the century, when buyers including phone-operator NTT DoCoMo Inc., Toshiba and Nomura Holdings Inc. splashed out on overseas trophies such as AT&T Inc.’s wireless unit. The result was billions of dollars in writedowns and a gun-shy approach to foreign deals.
http://the-japan-news.com/news/article/0005462861
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This a repeat of last night. Same exact spot 24 hours ago.