The total value of M&A deals by Japanese companies fell 40% in the first half of this year according to Recof Data Corp. The decline is not just currency related, but due to fewer acquisitions by trading companies in the resources sector and also the slowdown of the Chinese economy.
The Nikkei opinion piece($) in which this statistic is quoted urges Japanese companies not to give up on overseas acquisitions, if they want to keep growing. According to the Nikkei, only five Japanese companies were among the world’s 100 most valuable businesses as of the end of June. Toyota is the largest Japanese firm in terms of market capitalization, but was ranked only 18th in the world. Softbank was 95th.
The opinion piece came out just as Softbank announced the completed acquisition of Sprint. It also coincided with an article in the Nikkei Business magazine with Yoshimitsu Kobayashi, the President of Mitsubishi Chemical Holdings, the biggest consolidated chemicals company in Japan. He described how, despite cutting Y320bn of unprofitable business from the company, turnover has actually grown, in large part due to acquisitions in Japan and overseas (Quadrant, Nippon Gohsei and Qualicaps).
One thing that unites Masayoshi Son and Yoshimitsu Kobayashi apart from their appetite for acquisition is that they are both mavericks, with unconventional backgrounds. Kobayashi joined Mitsubishi Chemicals at the age of 28, after working as a researcher in Israel and Italy. Being willing to kick against the conventions of the industry or the company, and not having any vested interests in particular divisions makes it easier both to divest and acquire.
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