Monthly M&A Insider - Mergermarket

Japan
Slight recovery in the Japanese M&A market
• In the second half of 2008, the number of M&A deals
decreased in Japan, and although there were major
outbound deals such as Mitsubishi UFJ’s acquisition of
Morgan Stanley preferential shares, the domestic market
was seeing significantly less activity compared to the first
half of 2008.
• In the first quarter of 2009, Japan has seen a slight
recovery in the number of M&A transactions on quarterto-quarter
basis, defying the global trend. While there
has not been any major deal in the year to date, the
mid-market M&A has become quite active across a wide
range of sectors. Moreover, private equity firms has
started their acquisitive moves as well, and in the first
quarter of 2009, the value of PE deals almost doubled
while the number increased by more than 40%. As the
exit deals are so far very limited in number, we can clearly
see that PE firms are trying to add on to their holdings
when attractive companies are affordable.
• Looking ahead, the region is expected to see more deals
as a result of the rollout of the global economic downturn.
Citigroup is rumoured to withdraw from all the retail as
well as the corporate business in Japan and to put their
Japanese operations up for sale. AIG is also expected
to sell its AIG Edison Life Insurance and AIG Star Life
Insurance. These targets are attracting buyers that are
aiming to fill in the empty space left after such major
overseas companies retreat, and this trend has stimulated
further merger talks among other financial firms and
insurance companies.
Nomura Holdings expands its global presence
• About half a year has passed since Nomura Holdings
acquired the Asia-Pacific and European operations of
insolvent Lehman Brothers in September 2008. While
the fiscal 2008 result of the company is yet to be
announced, the positive outcome of the acquisition has
become apparent in the financial adviser league tables.
• Nomura Holdings has long dominated the Japanese
financial adviser rankings, but their presence has always
been limited to the domestic market. As of 30 June
2008, the last quarter before the credit crunch, Nomura
Holdings ranked at 35 in value and 23 in volume in the
global financial league tables, while Lehman Brothers
ranked number 4 in value and 16 in volume. In the first
quarter of 2009, Nomura’s ranking has risen to reach 17
in value and 10 in volume globally.
• In addition to the acquisition of Lehman Brothers, there
are a few other reasons behind Nomura’s upsurge in
the global M&A market. Firstly, while the number of
M&A transactions declined globally, Japan is one of
few countries that has seen an increase on a quarter
to quarter basis. And although Nomura now has strong
overseas operations, its main foothold remains in Japan,
with a rise in Japanese M&A directly affecting Nomura’s
performance. Secondly, since the credit crunch came to
surface in 2008, some of the major players such as Merrill
Lynch have been merged with other firms, resulting in
fewer players left in the market. And while it is likely that
we see new firms entering the market, Nomura so far
successfully filled the void.
Monthly M&A report – 66