TOKYO -- Japanese electronics retailer Nojima is poised to expand into Southeast Asia with its planned acquisition of Singapore-based electronics and furniture chain Courts Asia in a deal estimated at about $80 million.
Nojima announced on Friday its intention to buy Courts Asia, as it seeks to make up for sluggish growth at home by acquiring a sales network that spans the fast-growing Southeast Asian region.
A number of Japanese gadget sellers are looking overseas for growth, but establishing sales networks is a challenge. The purchase of Courts Asia would highlight the progress of Nojima's overseas expansion drive.
The company plans to launch a tender offer for Courts Asia through its Singaporean subsidiary in late January. Nojima will seek to acquire more than 50% of Courts Asia's outstanding shares for about 0.205 Singapore dollars a share, just above its Monday closing price on the Singapore bourse.
Nojima says it expects the offer to succeed because Singapore Retail Group, Courts Asia's parent, which owns about 74% of the company's outstanding shares, has accepted Nojima's buyout offer.
Courts Asia has about 80 stores in Singapore, Malaysia and Indonesia. The company sells consumer electronics and furniture and posted sales of SG$713 million ($525 million) on a consolidated basis in the financial year ended March 2018.
Nojima will use the purchase of Courts Asia to gain control of the Singaporean company's purchasing and sales network, combining these with its own expertise. By strengthening its business in Southeast Asia, Nojima hopes to benefit from the growing market for consumer electronics in the region.
The Japanese company prides itself on its independence, declining to have staff from consumer electronics makers work at its domestic outlets, for example. It also operates two stores in Cambodia, sending its own employees to work there.
Nojima believes it can make its Courts Asia operations a pillar of its business, based on the skills it has developed in Cambodia.
Some of its Japanese competitors are also expanding overseas, especially in Southeast Asia, but so far their growth is limited. Nojima will gain a significant lead over its compatriots if it manages to acquire the 80 or so Courts Asia outlets in Southeast Asia.
According to Tokyo-based market research specialist GfK Japan, the Japanese consumer electronics market is estimated to have grown by around 1% in 2018 from 7.07 trillion yen ($64 billion) in 2017.
But the domestic market has lost steam, compared with the 2009 to 2011 period, when the "eco-point" incentive system for environmentally friendly consumer electronics pushed up demand, along with the shift to digital terrestrial broadcasting.
While some Japanese electronics retailers are strengthening their operations outside the consumer segment, Nojima continues to focus on businesses that it expects to mesh well with consumer electronics. As part of this effort, Nojima made two companies into subsidiaries: mobile phone sales company ITX in 2015 and internet service provider Nifty in 2017.