Sat, Jan 13, 2018 - Page 10 News List

Nomura Holdings envisions strongest year for mergers and acquisitions since 2011

Bloomberg

Nomura Holdings chief executive Koji Nagai attends an interview with Reuters in Tokyo, Japan, on Dec. 27 last year.

Photo: Reuters

Nomura Holdings Inc is confident of another bumper year advising on Japanese mergers after topping the rankings for the first time since 2011.

Japan’s buoyant stock market makes it a good time for companies to fund acquisitions by selling shares, playing to Nomura’s strengths in equity underwriting, global head of investment banking Minoru Shinohara said.

“M&A [mergers and acquisitions] will be the key driver for equity offerings because that will be a good story to tell investors,” Shinohara said in an interview in Tokyo.

Nomura’s resurgence in mergers advice last year was aided by large international deals, including Toshiba Corp’s US$18 billion memorychip unit sale.

Japan’s biggest brokerage had lagged behind global rivals on cross-border transactions.

Nomura chief executive Koji Nagai said in an interview last month that he is open to hiring entire teams of investment bankers in the Americas or even making acquisitions of his own.

Nomura beat Goldman Sachs Group Inc to the No. 1 spot last year in large part due to deals involving buyout firms, according to data compiled by Bloomberg.

It advised Toshiba on the sale of its memorychip business to a consortium led by Bain Capital and helped Hitachi Ltd offload a unit to KKR & Co for US$1.6 billion.

Shinohara expects more Japanese companies to sell non-core businesses and private equity firms to shop for further deals after spending a record amount on acquisitions in the nation last year.

“Japanese companies will continue to concentrate their operations and funds are getting more powerful,” the 56-year-old said.

Shinohara, who took the post in April last year, sees transactions in Japan’s equity capital market expanding this year as stocks rally, and technology and drug companies tap investors to make large acquisitions.

Bain Capital Private Equity managing director Yuji Sugimoto said in a separate interview that the banner year for buyouts would not be a one-off, as Japanese companies need to turn to deep-pocketed partners to revive or shed failing business units.

“We’ll see more and more examples of companies forming partnerships with private equity firms,” Sugimoto said.

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