ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Banking & Finance

Japan Inc turns to foreign brokerages for global M&A advice

Only 3 domestic brokerages rank among top 10 in April-September

The Nomura Securities logo is pictured at the company's head office in Tokyo's Otemachi district on Nov. 18, 2016.   © Reuters

TOKYO -- As corporate Japan pursues overseas mergers and acquisitions to make up for the shrinking domestic market, it is increasingly turning to foreign-affiliated financial institutions for advice rather than to Japanese domestic brokerages.

Only three Japanese financial institutions ranked among the top 10 M&A advisers in the April-September period. Nomura Securities ranked first by handling the sale of Toshiba's memory unit, climbing to top spot from eighth, with a 33.8% share of the value of deals done.

Mitsubishi UFJ Morgan Stanley Securities, which advised Toshiba suitor, U.S. private equity firm Bain Capital, came third.

SMBC Nikko Securities, a unit of Sumitomo Mitsui Financial Group, came seventh by handling a range of M&A deals.

But most Japanese brokerages lagged behind their foreign peers, which have been effective at gathering information and presenting proposals on the strength of their overseas networks and other expertise. Such networks are a prerequisite to place among top M&A advisers as the number of overseas deals by Japan companies rises.

More big Japanese companies are selling their units to concentrate on their core competence, such as the Hitachi group's sale of its chipmaking equipment subsidiary Hitachi Kokusai Electric.

In April-September, the number of acquisitions by Japanese companies jumped 9% from a year earlier to 1,783. But brokerages' advisory fees fell 18% to about 10.8 trillion yen ($94.6 billion), according to U.S. market research company Dealogic.

Last year's figure was buoyed by SoftBank Group's $32 billion acquisition of British chip designer ARM Holdings. The smaller amount per deal this year indicates that smaller businesses are actively pursuing deals.

Brokerages that worked on Toshiba's 2-trillion-yen chip unit sale topped the list, led by Nomura, with Goldman Sachs Japan in second place.

Nomura is actively handling acquisitions of U.S. companies by Japanese companies, betting the booming U.S. economy will produce higher returns, according to Shinsuke Tsunoda, global head of M&A at Nomura.

Mitsubishi UFJ Morgan Stanley Securities and Credit Suisse Securities (Japan), which advised Bain Capital and South Korea's SK Hynix -- part of the Bain-led consortium in their bid for Toshiba's memory unit -- came third and fourth, respectively.

Mitsubishi UFJ makes use of its partner Morgan Stanley's overseas network "to respond to customer requests and questions quickly and honestly," said Kensaku Bessho, head of the M&A advisory group at Mitsubishi UFJ Morgan Stanley.

SMBC Nikko, which mainly handles smaller businesses, ranked seventh in terms of deal amount, but handled the most deals among the top 10 companies, at 60, up 62% from a year earlier.

SoftBank Group's mega deal propelled Mizuho Securities to first place last year, but the Japanese brokerage did not make the top 10 this year.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends January 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media