Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: VAT Audit :: cpt :: TAX RATES - GOODS TAXABLE @ 4% :: articles on VAT and GST in India :: TDS :: VAT RATES :: list of goods taxed at 4% :: form 3cd :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: due date for vat payment :: ACCOUNTING STANDARDS :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
 
 
« Mergers and Acquisitions »
 What is Triggering the Wave of Mergers & Acquisitions in the Indian Internet Space?
 Oil and gas mergers and acquisitions are finally making a comeback
  Mergers: Commission approves acquisition of St Jude Medical by Abbott Laboratories, subject to conditions
 Mergers and Acquisitions: What’s Happening in the OFS Industry?
 Mergers: Commission approves acquisition of St Jude Medical by Abbott Laboratories, subject to conditions
 Prediction: These 8 Companies Will Get Bought in 2017
 Third Quarter Results Show Continued Strength in Mergers and Acquisitions
 Mergers and Acquisitions Modelling 3 Day Course - 23.03.17 - Research and Markets
 Foiled cross-border mergers and acquisitions
 Mergers and Acquisitions: 15 Important Considerations for In-House Counsel
 U.S. mergers and acquisitions activity expected to remain steady in 2017: KPMG

Get ready for more mergers and acquisitions from Japan says ANZ
June, 18th 2015

Cashed-up Japanese financial services firms will continue to look for takeover targets in Australia, said Peter Davis, the CEO of ANZ Banking Group in Japan.

Outbound mergers and acquisitions from Japan are surging, as the government of Prime Minister Shinzo Abe encourages companies to deploy massive cash piles to grow abroad. Last week, Japanese insurer Tokio Marine Holdings bought US-based HCC Insurance for $US7.5 billion ($9.7 billion). According to Dealogic, Japanese companies have announced $US50 billion of offshore acquisitions this calendar year to date, almost the total amount for 2014.

Nippon Life is reported to be in talks to buy National Australia Bank's life insurance division in a deal that could be worth $2.5 billion. Another Japanese life insurer, Dai-ichi, bought Tower Australia (now TAL) for $1.2 billion in 2011.

"Financial services is a great place for Japan to move into," Mr Davis said in an interview last week in his office looking down on Tokyo's grand train station. "We will continue to see strong interest from companies in Japan looking for opportunities in Australia. They have pockets full of cash and everyone is looking to invest."

Advertisement

Because the Japanese are cautious investors, developed markets remain attractive despite fuller valuations, he said, and Japanese companies are often willing to accept lower returns, given their cost of capital is close to zero, a product of the Bank of Japan's massive monetary stimulus.

The average dividend payout ratio of a Japanese firm is less than 30 per cent, and the 3,400 companies listed on the Tokyo Stock Exchange are sitting on more than $US1 trillion in cash according to an estimate by PwC. There are also limited opportunities for consolidation in Japan, where hostile takeovers are prevented by law.

Mr Davis has been running ANZ's Japanese business for three years; previously he was boss of the Australian infrastructure business. He says ANZ runs a very small balance sheet in Japan. "There is no money to be made lending in Japan because money is free."

Nevertheless, ANZ counts as clients some of the biggest Japanese conglomerates, including Mitsui Group, Mitsubishi Corporation, Sumitomo Corporation and Marubeni Corporation. ANZ is banking the resources and agribusiness operations of each company and is attempting to secure more infrastructure work.

Relationships matter more than business
ANZ's Japan office, which has 146 staff, recorded revenue of $100 million last year, mostly from transactions, markets operations and some project and aircraft financing. But in addition, ANZ made $300 million working for Japanese banks in other parts of the Asian region, including Vietnam, Indonesia and Cambodia.

"It is not so much the business in Japan that is important, but the relationships with Japan companies doing business in Asia," Mr Davis said. ANZ has an advantage advising Japan companies about Asia because it has been in various jurisdictions for longer than many of the Japanese banks, and operates in some where Japanese banks do not (for example, Cambodia, where ANZ has an 80 per cent market share banking Japanese corporates).

Mr Davis said he is now focused on penetrating Japan's giant manufacturing companies and is also building relationships with the managers of some large pools of capital, thinking that once global central bank quantitative easing stops and liquidity dries up, it might be called into play.

But ANZ faces stiffer competition. Mr Davis said Singapore's DBS and Japan's own mega banks, Mitsubishi UFG, Mizuho and Sumitomo Mitsui, are all starting to resemble ANZ by pursing a super-regional strategy.

While Australian firms like Lend Lease and Toll Holdings (which has been taken over by Japan Post) blazed a trail in Japan, not many Australian companies are active, which Mr Davis puts down to unrealistic expectations about the length of time it takes for operations to become profitable.

"The reason [Australian companies] are not doing well is their short term horizon. This means they are not willing to invest for long enough in local markets," he said.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Outsourcing Test Solutions Software Testing Software Bug Testing Software Issues Tracking Software Issue Fix Software Code Optimization Database Design Optimization

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions