Governance brings an M&A bounty to Japan
A generation of bank-funded conglomerates is belatedly discovering corporate governance. The resulting divestment of non-core assets has private equity and foreign investment banks excited. Those that have stayed the course are well placed to benefit.
Although the field of foreign investment banks active in Japan has dramatically thinned over the years, those that have stayed the course are in an unusually bright frame of mind today. The reason is a boost in M&A opportunity; the story of how we got here goes back several generations.
Historically, banks have had a very strong influence on Japanese corporates. After World War II, money was scarce and the capital markets were not yet available, so any company that wanted money needed support from Japanese banks.
This led to some distinctive and rather unhealthy habits.