Looking at this year's M & A-The next move of the company due to the corona disaster-February 10, 20:36
With the impact of the new coronavirus in its second year, many companies are under pressure to radically review their businesses.
What is attracting attention there is the movement of M & A = acquisitions and mergers.
Many companies are looking for collaboration with other companies in order to survive or expand their scale to challenge their rivals around the world.
Will there be a major industry restructuring?
We asked three key men involved in M & A about the outlook for this year.
(Keiichiro Furuichi, Reporter, Ministry of Economic Affairs)
Last year, it decreased for the first time in 9 years ... Will Corona push the back of the company?
M & A conducted to incorporate the technology and management base of other companies at once.
It requires a lot of money, and management is forced to make an important decision, so to speak, "betting on company luck."
Japanese companies have been aggressively pursuing M & A, such as acquiring overseas companies and aiming to expand their business scale, facing the shrinking domestic market due to the declining population, but the number of cases decreased for the first time in nine years last year. Turned to.
According to Recof, which mediates acquisitions of companies that have compiled statistics, it seems that negotiations have been interrupted or delayed in many cases as face-to-face contact is restricted due to the spread of infection.
However, this year, in order to respond to the drastic changes in the business environment in the corona, M & A movements may become active again.
The keyword is "visibility"
"Visibility = visibility" was cited as the keyword for this year's M & A by Kensaku Bessho, who has been in charge of the division for nearly 10 years at Mitsubishi UFJ Morgan Stanley Securities.
It is expected that restrictions on face-to-face contact will continue for the time being, such as the outbreak of mutant viruses, and it is expected that “offensive” M & A in which Japanese companies acquire overseas companies will continue to be difficult.
Mr. Bessho
High quality standards have been the standard for Japanese companies for many years, but in the current situation where it is difficult to inspect overseas factories, it can be said that it is a difficult situation to acquire a new company and take full responsibility for the quality of the manufacturing base.
On top of that, it is said that there will be more M & As with partners who already have a good grasp of the business situation, such as strengthening relationships with affiliated companies.
Mr. Bessho
A relationship that is familiar with each other.
Or maybe there will be more M & A to review the existing (capital) alliance.
Companies are shifting towards sustainable growth, such as by reviewing existing relationships.
Mr. Bessho gave an example of NTT DoCoMo's wholly owned subsidiary, which was established in December last year.
In order to strengthen cooperation among Group companies, NTT spent 4.2 trillion yen to acquire all the shares of its subsidiary DoCoMo, which attracted attention.
Mr. Bessho
(NTT's making NTT DoCoMo a wholly owned subsidiary) was a matter that happened to happen, although there were various issues and restrictions.
Is there any strategic significance for NTT to make DoCoMo a listed subsidiary in order to enhance its international competitiveness in the future?
The transaction came from a simple idea.
And I mentioned the automobile industry as an industry that I pay particular attention to.
The automobile industry is said to be in a period of change once every 100 years.
Up until now, a pyramid-type industrial structure has continued, with many companies such as parts manufacturers at the top, with the finished vehicle manufacturer at the top.
As the trend toward gasoline-free vehicles accelerates in the automobile industry, Mr. Bessho thinks that it may be difficult to maintain the structure of such an industry.
Mr. Bessho
Amid the wave of autonomous driving and EV shifts, some parts manufacturers are thinking of improving their management strength through integration.
There is a good chance that a reorganization will occur.
Not possible in a single industry
Next, I spoke to Mr. Shinsuke Tsunoda, who has been in charge of the M & A department for seven years at Nomura Securities, the largest in Japan, which was involved in eight of the top 10 M & A deals involving Japanese companies last year. ..
Mr. Tsunoda points out that the impact of the new coronavirus and the rebound of globalization require a different way of doing business than in the past.
Mr. Kakuda
Waiting for the convergence of Corona misses the opportunity for reform.
I think that more and more companies will embark on M & A without hesitation, even if they do not hesitate to reorganize their business, including the domestic one, which is the foundation, or even if they are not hostile, even if there are some conflicts and difficulties.
An increasing number of companies are preparing for an era of cataclysm by organizing concerns that need to be addressed.
On top of that, Mr. Kakuda cited "dialogue with shareholders" as a keyword.
Mr. Tsunoda is paying attention to the movement of the fund, which is also called an activist = a talkative shareholder.
An example is the acquisition of Tokyo Dome by Mitsui Fudosan, which was completed in January.
Hong Kong-based investment fund "Oasis Management Company", a major shareholder of Tokyo Dome, demands a drastic improvement in business from the Tokyo Dome side.
As a shareholder, I proposed to dismiss officers such as the president.
After that, Mitsui Fudosan embarked on a takeover bid for Tokyo Dome's TOB = shares, and the fund side also responded, closing the curtain with Mitsui Fudosan acquiring Tokyo Dome.
Mr. Tsunoda thinks that the number of cases in which such "activist's words" will trigger M & A will increase in the future.
Mr. Tsunoda Unlike the
hostile image of "the dividend should be increased", the number of activists who make rational proposals for corporate management reform is increasing.
Companies can no longer ignore it.
After that, he gave the following view on the outlook for this year's M & A.
Mr. Tsunoda
Japanese companies are reorganizing to "survive" the corona era.
However, it is also true that a single industry is no longer a business.
For example, an automobile manufacturer acquired a map service company, but M & A across industries will increase.
Withdrawal type M & A will increase
The third is Mr. Masahiro Matsuoka of Frontier Management, who provides advice on M & A and also supports corporate business revitalization.
Mr. Matsuoka has experience in many corporate revitalizations, such as working on the management restructuring of a major supermarket "Daiei" at the Industrial Revitalization Corporation of Japan.
I think that the corona wreck will lead to an increase in “withdrawal” M & As, such as selling overseas businesses to local companies.
Mr. Matsuoka
Japanese companies have expanded their businesses by acquiring overseas companies against the backdrop of low labor costs.
However, it is a fact that many businesses are sluggish without being profitable.
The new coronavirus has triggered management to review such businesses.
On top of that, the market restructuring of the Tokyo Stock Exchange was also mentioned as a point.
TSE plans to reorganize the current four markets, including the first and second sections, into three from April next year in order to make the market easier for domestic and foreign investors to understand.
In the "prime market," which is part of the current market, listing conditions will be stricter than they are now, so we are paying attention to the fact that the trends of companies that do not meet the conditions will be the key to M & A.
Mr. Matsuoka Some
companies will use M & A to reorganize or integrate in order to increase their market capitalization in order to remain in the prime market.
Large companies may be an opportunity to reassess the state of listed companies within the group, which may trigger industry restructuring.
And Mr. Matsuoka says that responding to DX = digital transformation, which transforms business with digital technology, is also indispensable for fortune-telling M & A.
Mr. Matsuoka With the
demand for DX support, the number of M & As in which large companies are incorporating IT and AI venture companies is increasing.
I think that the “winners” of each industry will accelerate cooperation across industry boundaries.
The Japanese economy has no clear path to normalization due to the prolonged effects of the spread of the new coronavirus.
However, under the surface, many companies are actively moving toward post-corona.
I would like to keep an eye on future developments as to whether some companies will make a bold leap through M & A.
Economy reporter
Furuichi AkiraIchiro
2014. He joined
responsible for the financial industry is currently through the Niigata stations