Summit Notebook
Exclusive outtakes from industry leaders
Nomura: Lehman taking shape
Nomura’s takeover of Lehman Brothers’ European and Asia businesses is yielding results, and concerns the Japanese bank will struggle to marry cultures is misplaced, according to the man who drove the deal.
“It’s a very successful start and we’ve been happy with what we’ve got,” Takumi Shibata, chief operating officer for Nomura, told the Reuters Japan Investment Summit in Tokyo.
“We are finding surprisingly little differences between Lehman in Asia and Europe and Nomura in Asia and Europe. It was a marriage of two multicultural organisations, and both Lehman Brothers and Nomura aspire to be houses with a collegiate culture.”
Nomura had kept most of the Lehman staff it wanted to, has learnt from past international expansion mistakes, and was winning back business lost in the aftermath of the deal, he said.
It was number three in London equities trading in June, for example — from “nowhere” in December and number 8 in May. Lehman had been number one before its collapse, however. “There’s no guarantee that we will go back to number one, but we want to be,” he said.
Nomura is also hiring bankers to beef up its U.S. presence, and is applying for an equity license in Australia and looking for a partner in China.
Expect action in Japanese M&A
After falling off a cliff at the start of this year as the global financial crisis gripped, mergers and acquisitions by Japanese companies overseas are likely to pick up again in the second half of this year, according to boutique Japanese M&A advisory firm Recof Corp.
There won’t be a flood of deals, Recof President Hikari Imai says, but the ones there are, are likely to be chunky as Japanese companies expand their frontiers beyond domestic markets where growth prospects are limited.
Geographically the focus is likely to be Asia — China, India in particular and possibly the Philippines or Australia. And the types of companies looking abroad will broaden as well, Imai told the Reuters Japan Investment Summit.
Recof expects Japanese power utilities, paper, food and beverage and retailing firms to look abroad at markets where they can put their advanced technology and inventory control systems to use.
The sort of companies that up till now have been focused on their home base. Driving all of this will be expectations of lack of growth in Japan’s own markets as it climbs slowly out of recession and its population ages — and saturation domestically.
So Imai reckons yen strength and the big drop in stock markets everywhere mean it may be an opportune moment for companies with overseas ambitions.
Many Japanese companies are rolling in cash as they were less exposed to toxic assets. Interesting to watch where they go shopping and what they shop for.
