This post is also available in: Japanese
Something that we’ve been noticing for a while is that Japanese trading companies (sogo shosha) have been divesting long held assets, particularly in Japan and in the UK. These assets are known as toranoko or tiger cubs, meaning a treasure in Japanese. It seems the sogo shosha are no longer afraid to sell assets if they do not meet their desired investment efficiency or if the proceeds from the sale exceed medium- to long-term profit expectations.
In the case of Mitsubishi Corporation (who have recently declared they no longer want to be referred to as a trading company), this has included selling off 50% of Lawsons, the convenience store chain, in Japan and in the UK, Princes Foods has been up for sale since 2022.
These divestments are partly to do with the current President, Nakanishi Katsuya, coming from the typically hard headed and unsentimental Heavy Machinery group, making a big break from his predecessor Kakiuichi Takeo’s strategy. Kakiuchi came from the Foods Group and was President of Mitsubishi Corp from 2016 to 2022. Mitsubishi Corp increased its stake in Lawson in 2017, having become the main shareholder in 2001, taking over from Daiei. You might think from the name that Lawson is an American company – and it was, originally, eventually becoming CircleK. More here on Wikipedia.
Other divestments in the food business are of shareholdings which pre-date Kakiuchi – Mitsubishi is also looking to reduce its stake in KFC Japan, the majority of which it acquired in 2007. Princes Foods was acquired in 1989 and in turn has its roots in Mitsubishi’s involvement in canned food dating back to before WWII.*
The divestments are not just in food. Mitsubishi also sold its 20% stake in Fujifilm Diosynth to Fujifilm, in June 2023 and sold off various mining ventures that year too. Other sogo shosha are also divesting in the UK and elsewhere. Sumitomo Corp and its partner Osaka Gas pulled out of a UK water company and an American tyre retailer – the rumour persists they may want to sell off the UK’s Kwik-Fit and associated tyre wholesaling businesses as well. Itochu Corporation also sold its consumer finance business in Indonesia last year.
As to where the money made is then invested – the answer is mainly not Europe, and a focus on energy, minerals and digital. Mitsui is investing in Taiwanese off shore wind power, Mitsubishi in a US data center, Itochu is buying back Itochu Techno Solutions, Marubeni is investing in a Chilean copper mine and Sumitomo Corporation in an Australian LNG project.
*Update 28th May – Mitsubishi Corporation has just announced that it has agreed to sell Princes for £700m to Italian company Newlat.
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