By Makiko Yamazaki and Ritsuko Shimizu
TOKYO (Reuters) – Japanese banks have become less reluctant to finance hostile takeovers because new government guidelines on takeovers have shaken off the taboo on such deals, the new head of Japan’s banking lobby said.
The comments of Akihiro Fukutome, head of the Japanese Bankers Association, offer evidence of a sea change in Japan that has helped bring it closer to Western-style arrangements.
“Banks were previously concerned about the reputational risks” of supporting unsolicited offers, Fukutome said in an interview. “But I believe the new acquisition guidelines issued by the Ministry of Industry last year have helped reduce the psychological hurdles.”
Hostile bids, once shunned because they were considered harmful to Japan Inc’s collaborative ethos, are still relatively rare, but the frequency is increasing.
The Ministry of Economy, Trade and Industry (METI) last year issued new guidelines on mergers and acquisitions aimed at cracking down on excessive defense tactics, remove a long-standing stigma around unsolicited bids and spur takeovers corporate.
The non-binding guidelines have already prompted companies such as electric motor maker Nidec and life insurance company Dai-ichi Life Holdings to launch hostile bids.
Fukutome, who also heads the main banking arm of Sumitomo Mitsui Financial Group (NYSE:), said banks should consider unsolicited proposals if a deal would benefit the target company and help improve its value in the long term. term.
“The atmosphere for unsolicited deals is changing and we have seen an increase in such deals in our pipeline,” he added.
There have been three hostile takeover proposals in the past 12 months in Japan, including a bid by Brother Industries to counter a management takeover of Roland DG, LSEG data shows.
Japanese investment bank Daiwa Securities Group said it is willing to advise a hostile buyer on merit if the deal would benefit the target company or its industry.