William J. Holstein

East Asia Watch: Japanese Acquisitions Are Surging

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The conventional wisdom in the American media is that Japan is a basketcase, as I've described on many occasions. Here is the latest piece of evidence that those portrayals are completely wrong: Japan has leapfrogged rivals such as China to become the third-biggest cross-border acquirer, according to the Wall Street Journal. Japan is No. 3 behind the United States and Britain. And since London is used as a launching pad for acquisitions by companies of many different nationalities, the chances are that Japan is No. 2, behind only the United States.

The Journal describes how Japanese companies are propelled by a strong yen (at 77 to the dollar) and slow growth in a saturated home market. The paper cites Dealogic as saying the value of Japanese M&As so far this year totals a record $79.7 billion led by Takeda Pharmaceutical's $14 billion purchase of Swiss competitor Nycomed. Note that this is a record level of acquisitions for Japan.

Since the 2008 financial crisis, Japanese companies have amassed stockpiles of cash and refrained from spending, the Journal says. Now they are spending it. Japanese companies are becoming even more internationalized.

(c) 2011 William J. Holstein. All rights reserved.
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