Nikkei's 'pink 'un' buy highlights need to escape greying Japan

Fri Jul 24, 2015 12:54pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Denny Thomas

HONG KONG (Reuters) - In splashing $1.3 billion for Britain's Financial Times, media group Nikkei is just the latest in a string of Japanese companies driven to look overseas to escape poor growth prospects from a rapidly aging domestic population.

Flush with abundant bank funds available at near-zero interest rates, and bolstered by stock markets at multi-year highs, Japan Inc is not short of capital to plough into overseas bids in search of profits that remain stubbornly hard to generate at home.

Japanese corporations have in the past faced criticism for moving too slowly on the acquisition trail, but Thursday's last-minute bid by Nikkei to snatch the famous pink-hued newspaper from under the nose of Germany's Axel Springer suggests they are getting better at it.

"Japan corporates are definitely wanting to acquire more. Corporate profits have risen a lot and with that has come increased confidence for CEOs to make quick decisions," said Mark Williams, head of investment banking for Asia ex-Japan at Nomura. "They are far more receptive to international ideas and we definitely see more deals coming."

Nikkei's coup was followed on Friday by a bigger deal from life insurer Meiji Yasudas Life Insurance Co [MEIJY.UL], which agreed to buy StanCorp Financial Group for $5 billion.

That deal nudged Japan past China to become Asia's biggest acquiring nation this year, according to Thomson Reuters data.

After hitting an annual record of $83 billion in 2012, Japanese outbound activity has slowed, but companies are making a renewed pushed this year, partly under pressure to improve efficiency.

In 2015, Japanese companies have launched $53.5 billion worth of deals and are on track for the country's second-best M&A year on record. In comparison, Chinese companies have announced $50 billion deals in the same period.   Continued...

A logo of Japan's Nikkei newspaper is displayed atop of the headquarters building in Tokyo July 24, 2015.  REUTERS/Issei Kato