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Japanese banks are showing a newfound openness towards financing hostile takeovers, a shift attributed to the government’s recent revision of takeover guidelines.
Akihiro Fukutome, the newly appointed head of the Japanese Bankers Association, highlighted this change in an interview, stating that “Banks were previously worried about reputational risks” in helping unsolicited bids. He also said that “But I believe new takeover guidelines from the industry ministry last year have helped lower psychological hurdles.”
Fukutome’s remarks underscore a significant departure from Japan’s traditional approach to dealmaking, bringing the country closer to Western norms in the corporate arena.
The Ministry of Economy Trade and Industry (METI) implemented new M&A guidelines aimed at curbing excessive defensive tactics and eliminating the stigma surrounding hostile bids, thereby encouraging corporate takeovers.
While hostile bids remain relatively uncommon, their frequency is on the rise. Companies like electric motors manufacturer Nidec and life insurer Dai-ichi Life Holdings have already capitalized on the new guidelines, initiating hostile takeover bids in response to the changing landscape.
Fukutome, who also heads the core banking arm of Sumitomo Mitsui Financial Group, emphasized that banks should assess unsolicited proposals based on their potential to benefit the target company and enhance its long-term value.
He noted a shift in the atmosphere surrounding unsolicited bids, citing an increase in such deals in their pipeline. Over the past year, Japan has seen three hostile takeover proposals, including Brother Industries’ bid to thwart a management buyout at Roland DG, according to LSEG data.
Daiwa Securities Group, a prominent Japanese investment bank, has expressed willingness to advise hostile acquirers if the proposed deal would benefit the target company or its industry. This evolving stance among Japanese banks and financial institutions reflects a broader transformation in the country’s corporate culture, signaling a departure from the traditional aversion to hostile takeovers and a growing acceptance of strategic acquisitions for long-term growth and competitiveness.
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