"My impression is that Steel Partners is the biggest winner," an analyst from Credit Suisse said. "The domestic instant noodle market has matured along with other processed foods, but noodle firms still have plenty of potential to increase their business overseas."
Nissin, which says it wants at least a 33.4 per cent stake in Myojo, would need ?12.7 billion to fund the acquisition, but can call on cash and equivalent reserves of more than ?200 billion, according to Merrill Lynch. But Steel Partners' ?36.9 billion stake in Nissin has left the Japanese food industry wary of hostile takeovers, particularly by foreign companies.
"We think this latest case marks the first salvo in a shakeout involving the large swallowing the small in the food industry," Ritsuko Tsunoda of Merrill Lynch said.
Next spring, regulations on mergers and acquisitions will be relaxed to make it easier for foreign firms to bolster their presence.
"The trend won't be limited to the food industry," the Credit Suisse analyst said.
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