SoftBank acquires ARM Holdings plc driven by paradigm shift to Internet of Things (IoT)


On 18 July 2016 SoftBank announced to acquire ARM Holdings plc for £17 per share, corresponding to £24.0 billion (US$ 31.4 billion)

SoftBank acquires ARM: acquisition completed on 5 September 2016, following 10 years of “unreciprocated love” for ARM

On 18 July 2016 SoftBank announced a “Strategic Agreement”, that SoftBank plans to acquire ARM Holdings plc for £24.0 billion (US$ 31.4 billion, ¥ 3.3 trillion) paid as follows:

  • Cash on Hand: £16.7 billion (US$ 12.5 billion, ¥ 2.3 trillion)
  • Loans: £7.3 billion (US$ 9.5 billion, ¥ 1.0 trillion)
  • Total: £24.0 billion (US$ 31.4 billion, ¥ 3.3 trillion)

(excluding 20.4 million shares (1.4%) that SoftBank already owned on 18 July 2016).

Acquisition schedule:

  • 18 July 2016: Strategic agreement between SoftBank and ARM announced by SoftBank
  • 5 September 2016: effective date of Scheme of acquisition
  • 6 September 2016: ARM delisted, cancellation of listing of ARM shares
  • 12 September 2016: cancellation of listing of ARM US Depositary shares (ADS)

Straight line from SoftBank’s acquisition of Vodafone-Japan to acquisition of ARM

In a detailed interview in Nikkei on 3 September 2016, Masayoshi son explained that he was interested in ARM ever since about 1906, when saw the paradigm shift from PC to mobile, when he discussed his designs for mobile internet handsets with Steve Jobs, and when he acquired Vodafone-Japan (see: Why did Vodafone fail in Japan? … and miss an opportunity of US$ 83 billion).

SoftBank’s acquisition of Vodafone Japan is explained here: Softbank acquires Vodafone Japan with co-investment from Yahoo KK

SoftBank’s acquisition of Vodafone Japan – in combination with having developed YAHOO-Japan into the leading internet service company in Japan – enabled SoftBank to become a key global player in mobile communications.

Masayoshi Son: unreciprocated love for ARM for 10 years

In the Nikkei interview of 3 September 2016, Masayoshi Son explains that he had an “one-sided / unreciprocated love for ARM” for at least 10 years, but decided to acquire SPRINT first. After acquiring SPRINT he had to pay down debt before being able to acquire ARM now.

ARM Holdings plc

ARM was founded on 27 November 1990 as Advanced RISC Machines, however the abbreviation ARM was first used in 1983 and initially meant “Acorn RISC Machines”.

Acorn Computers Ltd was founded in 1978 in Cambridge (UK) by Hermann Hauser and Chris Curry to produce computers, and its most famous product was the BBC Micro Computer.

ARM has built an ecosystem of IC design systems and platforms which are at the core of low energy consumption ICs and CPUs for smartphones and many other electronic devices and cars. ARM may become or already is one of the core technology companies for the Internet of Things (IoT).

SoftBank’s ARM Business Department’s name changed to “New Business Department”

On 3 September 2016 SoftBank announced that the name of SoftBank’s ARM Business Department has been changed to SoftBank New Business Department.

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Copyright (c) 2016 Eurotechnology Japan KK All Rights Reserved

Toray acquires Delta-Tech SpA to expand carbon fiber business in Europe

Toray acquires Delta-Tech: 55% of Italian fiber manufacturer Delta-Tech SpA including Delta-Preg SpA

Toray management program Project AP-G 2016: “thorough implementation of growth strategy through innovation and aggressive management”

Toray acquires Delta-Tech: acquires 55% of outstanding shares of the Italian prepreg manufacturer Delta-Tech SpA including the fully owned subsidiary Delta-Preg SpA.

Delta-Tech SpA and Delta-Preg SpA

Delta-Tech SpA was founded in 1999 for products in the composite materials industry.

Delta-Tech product groups include:

  • fabrics: woven carbon, multi axial stitched carbon, woven glass…
  • UD tapes: HS carbon fiber, IM carbon fiber etc
  • Kordo: pre-formed edging system
  • SIMS: Semi-impregnated micro-sandwich, laminates based on the use of non-woven needle punched fabrics with micro-sandwich structures. Applications are automotive body panels and personal protection equipment

Delta-Preg SpA was founded in 2001 and manufactures textiles.


Pre-Preg are pre-impregnated composite fibers with a matrix material such as epoxy.

Toray’s medium term management program “Project AP-G 2016” (from April 2014 to March 2017)

Toray’s Project AP-G 2016 is part of Toray’s long term vision “AP-Growth TORAY 2020“, and follows “Project AP-G 2013.

Thorough implementation of growth strategy through “innovation and aggressive management”.

Key benchmarks for FY 2016:

  • Consolidated net sales: YEN 2.3 trillion (US$ 23 billion)
  • Consolidated operating income: YEN 180 billion (US$ 1.8 billion)
  • ROA 8%
  • ROE 10%

Toray’s long term vision “AP-Growth TORAY 2020“: become “a global top company of advanced materials”

AP-Growth TORAY 2020 is a unified growth map for the next 10 years based on Toray’s corporate vision of “contributing to society through the creation of new value with innovative ideas, technologies and products”.

Key KPI’s for AP-Growth TORAY 2020 (to be achieved around 2020)

  • consolidated net sales: YEN 3 trillion (US$ 30 billion)
  • Consolidated operating income: YEN 300 billion (US$ 3 billion)
  • Operating income margin: 10%
  • ROA: 10%
  • ROE: 13%

Toray Industries, Inc. (東レ株式会社) “Innovation by chemistry” (化学による革新と創造) (TSE 3402, LSE TKK)

Toray Industries, Inc. (東レ株式会社) was founded on 12 January 1926 with an investment by Mitsui Bussan. The company was incorporated as Touyou Rayon (東洋レーヨン) on 16 April 1926.

In 1970 the company name was changed to Toray KK (東レ株式会社). Toray is the abbreviation of Touyou Rayon (レーヨン).

Toray’s main business are:

  • fibers and textiles
  • plastics and chemicals
  • IT related products: films, color filters, products for IC production, graphics materials
  • carbon fiber composites
  • environment and engineering: water treatment membranes, materials for housing, environmental equipment
  • life science
  • other: analysis, research related services

Toray builds integrated supply chain in Europe

Through a program of acquisitions, Toray is building an integrated supply chain in Europe:

  • Delta-Tech SpA and Delta-Prepreg SpA
  • Saati SpA’s European carbon fiber fabric and prepreg business, renamed: Composite Materials (Italy) S.r.l., (CIT)
  • Alcantara S.p.A.: Trading activities, manufacture and marketing of ALCANTARA®, unique covering material
  • Toray Carbon Fibers Europe S.A. (CFE): polyacrylonitrile (PAN) precursor
  • Toray Films Europe S.A.S. (TFE)
  • Toray Textiles Central Europe s.r.o. (TTCE)
  • Euro Advanced Carbon Fiber Composites GmbH (EACC): Manufacture and marketing of CFRP parts and components for automobile
  • ACE Advanced Composite Engineering GmbH (ACE)
  • Toray International Europe GmbH (TIEU)
  • Toray Resins Europe GmbH (TREU): Import and sales of resin products
  • Greenery GmbH: Development, manufacturing, and sales of fuel cells and water electrolysis components
  • Toray Membrane Spain S.L. (TMSP): Marketing and consulting of water treatment membranes
  • Toray Membrane Europe AG (TMEu): Importing and Sales of RO membrane element, UF/MF hollow fiber membrane module, and submerged module of flat sheet membrane
  • Toray International U.K. Ltd. (TIUK): trading
  • Toray Textiles Europe Ltd. (TTEL): Weaving and dyeing of polyester filament textiles

Copyright·©2015 ·Eurotechnology Japan KK·All Rights Reserved·

Suzuki Volkswagen “Wagen-san” divorce: a teachable moment

Volkswagen VW Suzuki

“Mr. Suzuki didn’t want to be a VW employee, and that’s understandable” (Prof. Dudenhoeffer via Bloomberg)

Suzuki Volkswagen divorce: Volkswagen makes approx US$ 1.3 billion profit, Suzuki comes out more or less even

by Gerhard Fasol, All Rights Reserved. 18 September 2015, updated: 27 September 2015

A smiling Martin Winterkorn and Osamu Suzuki (79 years old at that time) looking the other way celebrated their freshly agreed “comprehensive partnership” at a press conference in Tokyo on December 9, 2009. Friends of mine who attended this press conference told me later that the lack of communication between Martin Winterkorn and Osamu Suzuki was quite visible to the audience, and that they already then had doubts about the future of this partnership.

Its interesting to look at the faces of Mr Winterkorn and Mr Suzuki in Reuters’ photograph of the occasion – a beaming Mr Winterkorn, and Mr Suzuki looking away from Mr Winterkorn – avoiding Mr Winterkorn’s eyes.

Wall Street Journal reported, that Suzuki and Volkswagen would negotiate details of their “comprehensive partnership” sometime later weeks or months after the announcement. We now know that these negotiations did not lead anywhere, and were never concluded.

Reuters reports that at the press conference VW CEO Martin Winterkorn focused on his plan to overtake Toyota as the global No. 1 carmaker in 2018 or earlier, Suzuki being obviously meant as a step to achieve this target to overtake Toyota and become No. 1 globally. According to Reuters, Volkswagen sold 3.265 million cars in the first half of 2009, and Suzuki sold 1.15 million – if combined, if Suzuki would become Volkswagen’s subsidiary, this would be 4.42 million compared to Toyota’s 3.564 million.

Suzuki Motor Corp. CEO Osamu Suzuki is reported by Reuters to have emphasized that he wanted to clear up any misunderstanding: he definitely did not want Suzuki to become a 12th brand for Volkswagen, and he does not want other people to tell him what to do – in reply to the question if he could see a German CEO for Suzuki Motor Corporation.

Suzuki Volkswagen alliance

Suzuki Volkswagen alliance time line

  • 9 Dec 2009: VW-CEO Martin Winterkorn and Suzuki-CEO Osamu Suzuki announced the “comprehensive partnership” at a press conference in Tokyo
  • 9 Dec 2009: Suzuki transferred 107,950,000 treasury shares to Volkswagen AG, valued approx at 226,695,000,000 yen (= approx. US$ 2.3 billion)
  • Suzuki acquired a 2.5% voting stake in Volkswagen for US$ 1.13 billion
  • 15 Jan 2010: VW purchased 19.89% of Suzuki shares for about € 1.7 billion
  • 1 July 2011: Osamu Suzuki publicly denounces “Wagen-san’s” intentions in his Japanese language blog in Japan’s Nikkei “スズキとワーゲンの今とこれから (鈴木修氏の経営者ブログ)” (“Suzuki and Wagen now and the way forward”) (may need Nikkei subscription)
  • Sept 2011: Suzuki’s Board decides to terminate the partnership
  • 18 Nov 2011: Suzuki gives notice to Volkswagen of termination of partnership, Volkswagen does not reply
  • 24 Nov 2011: Suzuki files for arbitration at International Court of Arbitration of the International Chamber of Commerce (ICC) in London
  • 30 Aug 2015: ICC Arbitration Court issues judgement and holds the termination of the partnership valid, orders VW to sell all Suzuki shares back to Suzuki, and orders Suzuki to pay damages for breaking the agreement
  • 17 Sep 2015 8:45am: Suzuki purchases back 119,787,000 of its own shares previously owned by VW back via Tokyo Stock Exchange ToSTNeT-3 system for 460,281,547,500 yen (approx. US$ 3.9 billion)
  • 26 Sep 2015: Suzuki announced the transaction to sell all 4,397,000 Volkswagen shares which Suzuki owns to Porsche Automobile Holding SE, completing the termination of the partnership and capital alliance with VW

No common language, colliding expectations and no “meeting of minds”

Much has been reported in the press about what went wrong with the Suzuki-Volkswagen alliance, and both parties obviously have a very different understanding of the development, and both sides will feel obliged to maintain confidentiality. The ICC arbitration is also confidential. Therefore it will be hard to establish the precise facts.

However, it is obvious, that from the start there was no “meeting of minds”.

Expectations were very different and on collision, and obviously were never discussed openly between VW and Suzuki at CEO level. Even if they had wanted to, without any common language any direct communication was impossible anyway between CEOs.

Suzuki apparently hoped to receive technology from Volkswagen, Suzuki is reported to have hoped for personnel support, workers from Volkswagen (?) – it is not clear to this author what Suzuki was planning to give in return. Suzuki apparently gave up on the hope to obtain Diesel engines from Volkswagen and in the end did so from Fiat, which Volkswagen claimed to be an infringement of the cooperation agreement, a view which seems to have been maintained by the ICC arbitrators.

It is obvious, that Volkswagen was aiming to acquire increasing stakes of Suzuki, and was aiming to make Suzuki a subsidiary under Volkswagen control. Volkswagen was particularly interested in Suzuki’s market position in India via Maruti Suzuki India Limited, and by Suzuki’s know-how in designing and producing cost-efficient small sized vehicles. Again its unclear what Volkswagen planned to give in return.

Reportedly, Volkswagen demanded to increase the holding of Suzuki shares to 33% to “facilitate technology transfer”.

In September 2011, Suzuki Motors’ Board of Directors decided to terminate the cooperation with VW, making Suzuki Volkswagen divorce unavoidable.

On 18 Nov 2011 Suzuki gave notice to Volkswagen of termination of the partnership, and asked for return of the Suzuki shares. Volkswagen held on to the Suzuki shares for the time being.

Osamu Suzuki denounces “Wagen-san” intentions publicly in his Japanese blog in Nikkei – the world’s largest business daily.

On 1 July 2011, Suzuki-CEO Osamu Suzuki chose to inform the world in great detail about his opinion and decisions about the relationship between Suzuki and “Wagen” (ワーゲン). This article is entitled “スズキとワーゲンの今とこれから (鈴木修氏の経営者ブログ)” (english translation: “Suzuki and Wagen now and the way forward” (Osamu Suzuki’s management blog)). Osamu Suzuki’s blog can be read here (may need Nikkei subscription).

Clearly, calling Volkswagen “Wagen” and “Wagen-san” already expresses Osamu Suzuki’s frustrations very clearly. We are not sure, but most likely Volkswagen CEO and top management probably read this blog a few days later once it was translated by VW’s Japanese staff.

With this blog article it was unmistakably clear to the world that the Suzuki-“Wagen” cooperation had been broken down without any possibility for repair, and makes the Suzuki Volkswagen divorce public.

Professor Ferdinand Dudenhoeffer, Director of the Center for Automotive Research at the University Duisburg-Essen according to Bloomberg, summarized: “Mr Suzuki didn’t want to be a Volkswagen employee, and that’s understandable”.

VW’s reply: “The tail is not going to wag the dog” (VW-CEO Winterkorn cited in Der Spiegel on 19 Sept 2011)

Germany’s leading intellectual and business weekly Der Spiegel on 19 Sept 2011 quotes VW-CEO Martin Winterkorn about the VW-Suzuki relationship: “Da wackelt der Schwanz nicht mit dem Hund” (the tail is not going to wag the dog).

In the same article Der Spiegel of 19 Sept 2011 states that if Suzuki terminates the cooperation agreement with Suzuki, then VW would be free to increase its ownership in Suzuki even to a majority ownership, and Der Spiegel quotes an unnamed top VW Manager: “Ich schließe dies Möglichkeit nicht aus” (I don’t exclude this possibility).

In the same article, Der Spiegel reports that in an unnamed VW Executive’s opinion, future acquisition of a majority of shares of Suzuki by VW has been agreed since the beginning of the negotiations: clearly exactly the opposite of Suzuki-CEO Osamu Suzuki’s public statements – pointing to a huge misunderstanding between both CEOs.

Suzuki Volkswagen divorce: ICC arbitration results

On 30 August 2015, Suzuki announced details of the arbitration in London and its result in a press notice.

According to Suzuki, Suzuki requested VW to terminate the alliance and the capital relationship, but VW apparently did not respond. Therefore, Suzuki gave notice on 18 Nov 2011 of the termination, and on 24 Nov 2011 Suzuki filed for arbitration with the International Court of Arbitration of the International Chamber of Commerce (ICC). Suzuki asked for termination of the agreement with VW, and to rule that VW should sell all Suzuki shares either directly to Suzuki, or to a third party determined by Suzuki.

One 30 August 2015, the ICC ruled:

  • Termination of Suzuki-VW Framework Agreement: Suzuki’s termination notice of 18 Nov 2011 is valid, and the alliance therefore ended on 18 May 2012.
  • Divestment of shares in Suzuki: VW must sell all shares of Suzuki either direct to Suzuki or to a third party nominated by Suzuki
  • Suzuki’s breaches of agreement: IIC found that Suzuki violated some parts of the Framework Agreement, and that damages to be paid by Suzuki to Volkswagen will be determined later.

Lessons to learn from the Suzuki Volkswagen divorce: communication & respect

  • “Comprehensive partnership” without meeting of minds does not work
  • Partnerships are hard when CEOs on both sides don’t have any language in common, thus can’t talk to each other
  • Hidden agendas destroy trust
  • Without trust partnerships don’t work
  • Processes and methods (e.g. acquisitions of minor players all over Europe) successful in Europe often don’t work in Japan
  • Partnerships without respect both ways don’t work
  • Renault and Carlos Ghosn show us how to build a Japanese-European car company alliance, Daimler (with Mitsubishi Motors) and Volkswagen (with Suzuki) show us how it does not work

Suzuki Volkswagen alliance: financial aspects

  • Volkswagen reportedly paid Suzuki 222.5 billion yen (= approx. US$ 2.5 billion) for 19.89% of Suzuki’s shares
  • Suzuki acquired a 2.5% voting stake in Volkswagen for US$ 1.13 billion

On December 9, 2009, Suzuki transferred 107,950,000 treasury shares to Volkswagen AG, valued approximately at 226,695,000,000 yen (= approx. US$ 2.3 billion)

On June 3, 2010, Suzuki announced the offer of additional shares to be issued by third-party allotment to Volkswagen AG to bring Volkswagen’s share up to 19.89% as follows:

  • 3,660,000 newly issued shares
  • issue price 1755 yen per share
  • total proceeds = 6,423,300,000 yen (= approx. US$ 64 million)

Suzuki announced to use the funds received from Volkswagen as follows:

  • 122,484 million yen (= approx. US$ 1.2 billion) for Research and development expenses focusing on environmentally friendly, next generation technology for automobiles
  • 100,000 million yen (= approx. US$ 1 billion) Reduction of interest-bearing liabilities to improve financial position (corresponding roughly to the purchase costs of Suzuki’s 2.5% stake in Volkswagen)

Suzuki Volkswagen divorce: financial aspects

On September 17, 2015, Suzuki announced the acquisition of treasury shares in order to acquire the shares in Suzuki held by Volkswagen AG:

  • Suzuki acquired 119,787,000 Suzuki common stock shares
  • Total amount paid: 460,281,547,500 yen (US$ 3.9 billion)
  • Date of acquisition: Sept 17, 2015
  • Method: Purchase through ToSTNeT-3 on the Tokyo Stock Exchange at 8:45am Thursday 17 Sept 2015 before regular trading hours

Tokyo Stock Exchange’s ToSTNeT (Tokyo Stock Exchange Trading NeTwork) was launched in 1998, and reestablished on Jan 15, 2008, and the ToSTNeT-3 was established specifically for listed companies to acquire their own shares.

Suzuki has more than 1 Trillion yen (US$ 8.3 billion) in cash, and paid for the share purchase in cash from cash reserves.

Volkswagen had informed Suzuki to have sold 111,610,000 shares corresponding to 19.89% of voting shares, corresponding to approx. 463 billion yen ($3.8 billion).

On September 26, 2015, Suzuki announced the sale of all 4,397,000 Volkswagen voting shares Suzuki owned to Porsche Automobile Holding SE

  • Suzuki sold 4,397,000 Volkswagen voting shares to Porsche Automotive Holding SE
  • Suzuki did not announce the sales value. At VW’s current (27 Sept 2015) share price of € 115.82, the total sale revenue is expected to be approximately € 509 million (= approx. US$ 570 million)
  • Completion of sale: Sept 30, 2015
  • Suzuki reports an extraordinary profit of YEN 36.7 billion (= approx US$ 304 million) on this sale.

Ignoring transaction costs, interest, opportunity cost, arbitration and legal fees etc. the balance looks as follows:

  • Volkswagen purchased the 19.89% stake in Suzuki for approx. US$ 2.5 billion and sold the same stake for approx. $3.8 billion, i.e. making approx. US$ 1.3 billion profit
  • Suzuki sold its 19.89% shares to Volkswagen for approx. US$ 2.5 billion, and now repurchased the same shares for approx. $3.8 billion. In parallel, Suzuki purchased 2.5% of Volkswagen voting shares for approx. US$ 1.13 billion. Thus Suzuki overall, theoretically, made a small loss of approx. US$ 30 million on these transactions plus may have to pay damages to VW for breach of contract to be determined later by ICC.

Purely financially, Volkswagen made approx. US$ 1.3 billion profit on this transaction, while Suzuki came out more or less unchanged except for the damages Suzuki may have to pay to Volkswagen.

Suzuki Motor Corporation (スズキ株式会社) – slogan: “Small Cars for a Big Future”

In FY2014, Suzuki sold 750,000 cars in Japan and 1,170,000 cars in India

Suzuki Motor Corporation (スズキ株式会社) was founded by Michio Suzuki (鈴木道雄) (18 Feb 1887 – 27 Oct 1982) in October 1909 as Suzuki Type Machine Manufacturing Workshops (鈴木式織機製作所) in Hamamatsu, Shizuoka-ken.

On 15 March 1920 Suzuki-type Machine KK (鈴木式織機株式会社) was founded, and renamed to Suzuki Motor Engineering KK (鈴木自動車工業株式会社) in June 1954. In October 1990, the company was renamed to today’s name: Suzuki Motor Co Ltd (スズキ株式会社).

Suzuki’s international business includes:

  • Maruti Suzuki India Limited (マルチ・スズキ・インディア)
  • Magyar Suzuki Corporation (マジャールスズキ)
  • Changan Suzuki (長安スズキ)
  • P.T. Suzuki Indomobil Motor (スズキ・インドモービル・モーター)

In FY2014, Suzuki sold:

  • 750,000 cars in Japan
  • 1,170,000 cars in India
  • however, in 2012 decided to end car sales in the USA

Maruti Suzuki India Limited (マルチ・スズキ・インディア) – slogan: “Way of Life!”

Sanjay Gandhi first tried to cooperate with Volkswagen, cooperation attempts with Volkswagen failed, leading to cooperation with Suzuki

Maruti Suzuki India Limited was established in 1981 as Maruti Udyog Limited.

On 16 Nov 1970, the company ‘Maruti technical services private limited’ (MTSPL) was founded by the Indian Government to lay the foundation for an Indian automotive industry, and Sanjay Gandhi was the first CEO.

Sanjay Gandhi contacted Volkswagen AG to seek a cooperation or joint-venture to produce an Indian version of the VW Käfer (Beatle). However, a cooperation with Volkswagen did not work out. The company failed in 1977, and was reborn as Maruti Udyog Ltd by Dr V. Krishnamurthy.

In 1982, Maruti Udyog Ltd and Suzuki entered into a licensing and joint venture agreement, which has developed very well into India’s largest automotive company: today’s Maruti Suzuki India Limited (マルチ・スズキ・インディア).

  • publicly traded (BSE: 532500, NSE: MARUTI)
  • Market capitalization: 1.33 trillion Indian Rupees (US$ 20.23 billion) (as of Sept 18, 2015)
  • Market share in India: approx. 37% (2012) – 45% (2014) of India’s passenger car market (45% for 2014 according to Nikkei Business Online)
  • 6900 employees
  • Suzuki ownership: increased from 26% to 40% in 1987, increased to 50% in 1992. Currently Suzuki owns 54% of Maruti Suzuki.

Copyright·©2015 ·Eurotechnology Japan KK·All Rights Reserved·

Hitachi Rail Europe Ltd opens £82 million train factory in Newton Aycliffe, County Durham, UK


Hitachi received orders for 866 Intercity Express Program (IEP) carriages and for 234 carriages for Abellio’s ScotRail program, following 174 “Javelin” carriages

Hitachi Rail putting competitive pressure on Europe’s rail established rail manufacturers: Hitachi Rail has “on time delivery” at the top of the list of commitments to customers

Winning a series of train contracts, Hitachi Rail invested £82 million (= approx US$ 130 million) in a train manufacturing plant in Newton Wycliffe, Country Durham, UK.

Hitachi Rail Europe announced contracts for the following train carriages to be built in the Newton Aycliffe facility:

The £ 5.8 billion ($ 10 billion) Intercity Express Programme (IEP) was initiated in 2005 by the UK Department of Transport.

Earlier in 2004, Hitachi received an order for 29 6-car high-speed Class 395 “Javelin” trains (a total of 174 carriages), which went into regular service on 30 December 2009 on the Integrated Kent Franchise, between London St. Pancras Station and Ashford International Station, traveling this approx. 100km distance in 37 minutes, an average speed of 162 km/h.

For a background of the international business aspects of Hitachi, read an essay by the emeritus Chairman of Hitachi Europe, and emeritus Board Member of Hitachi Ltd. Sir Stephen Gomersall.

Hitachi Rail to challenge European rail manufacturers Siemens and Alstom

Europe is one of the world’s biggest rail markets, and has a number of established rail manufacturers including:

There has been a series of recent problems in Europe’s established rail industries, which may have contributed to Hitachi’s considerable business success in Europe:

Rail in Europe and in Japan are very very different stories

European rail services are predominantly owned, operated and controlled by Government agencies, and to some extent operations are contracted out for limited periods to private service operators, almost none of Europe’s rail services are fully privately owned and operated – a rare and very successful exception is the Jungfraubahn mountain railway.

Rail services in Japan on the other hand are largely owned and operated by a large number of private railways companies, most of which are very successful and profitable and growing and listed on the stock exchange.

Thus Hitachi Rail is used to satisfying the tough needs of very competitive and privately owned commercial rail operators, while Europe’s rail manufacturers to a large extent sell to Government controlled agencies, or directly to Governments, or under Government programs, such as UK’s Intercity Express Programme (IEP).

The Hitachi investment in context: maybe we see a shift in investment value from traditional manufacturing to intellectual business such as insurance and pharmaceutical research

Compare Hitachi’s £82 million (= approx US$ 130 million) with the recent acquisition of UK insurance company Amlin by Mitsui Sumitomo Insurance Company for £2.5 billion (approx. US$ 3.85 billion or ¥642 billion), or the acquisition of Cambridge/UK Heptares Therapeutics Ltd by the Japanese Sosei Group for US$ 400 million (US$ 180 million in cash plus up to US$ 220 million in incentives).

Of course we are comparing apples and oranges here, and the overall Intercity Express Programme (IEP) is on the order of £ 5.8 billion ($ 10 billion), but we may witness here a shift of investment value from traditional manufacturing to intellectual business such as insurance and pharmaceutical research here.

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Financial Times to be sold to Nihon Keizai Shinbun Corporation (株式会社日本経済新聞社, Nikkei Inc.)

Financial Times to be sold to Nihon Keizai Shinbun Corporation (株式会社日本経済新聞社, Nikkei Inc.)

Nikkei won the race. Axel Springer withdrew. £ 94 million made the difference.

On July 23, 2015 at 15:13 (3:13 pm) British Summer Time, Pearson and Nihon Keizai Shinbun Corporation announced the sale of the Financial Times Newspaper to Nihon Keizai Shinbun Corporation for £ 844 million (approx. US$ 1.3 billion) – sending shock waves around the global news industry.

FT: £ 94 million made the difference.

The Financial Times reported that Germany’s Axel Springer Verlag had offered £ 750 million in cash, but within the last 5 weeks Nihon Keizai Shinbun Corporation (Nikkei) quickly closed the acquisition with a 12% higher cash offer of £ 844 million, while Axel Springer withdrew. So it seems that in the end £ 94 million made the difference.

As a privately held company, Nihon Keizai Shinbun Corporation can act faster, and has far less constraints than the publicly traded Axel Springer Corporation.

Clearly in the best case, this acquisition will help Nikkei Inc to globalize and to bring Japan’s financial news and scoops via Financial Times to Western audiences, and vice-versa, and help both to learn from each other to speed up and expand the transition from paper to new digital business models.

Cultural issues and language issues: for effective cooperation, Financial Times leaders will need to learn Japanese and/or Nihon Keizai Shinbun leaders will need to learn much more English….

Writing news is an intensely intellectual activity. There will be interactions between Nikkei’s almost 100% Japanese reporters and Financial Times’ much more diverse creators. Given that almost zero of Financial Times’s staff speak any Japanese, and that knowledge of English language by Nikkei’s creators and editors is extremely limited, these interactions will be necessarily very limited, and will need intense efforts to expand. As you know, learning Japanese for Western people, and learning English for Japanese people is extremely difficult, especially at the level of writing compelling news to short deadlines and for some of the world’s most clever and demanding audiences – who are always able to defect to a Bloomberg terminal or to a news startup – or from this autumn to Apple-News.

Success of this acquisition is possible and could bring great benefits, but is by no means guaranteed.

Much has been written about editorial independence, separation of content creation vs advertising, and differences in editorial style and aggressive reporting between Financial Times’ aggressive London style vs Nikkei’s more obedient Tokyo style. Surely both can learn from each other!

Note also that the acquisition is subject to “regulatory approval”, and this may well impose conditions on the acquisition.

The context?

Nikkei’s acquisition of Financial Times follows on the heels of a long series of acquisitions in Europe by Japan’s advertising and media giant Dentsu. Given the business relationships between Nikkei and Dentsu, these may also have impact on The Financial Times, allowing The Financial Times to sell more advertising via Dentsu.

Another issues of course is, who did NOT acquire the Financial Times: Bloomberg seems to have not been involved, and Axel Springer seems to have withdrawn.

Nikkei Inc is not Japan’s largest media group – there are several much larger Japanese media groups, including the Yomiuri Shinbun group – the world’s largest newspaper group. Will they follow?

The Economist next?

It has been reported, that Pearson is currently also in the process of selling Pearson’s shares in the iconic Economist Group. Following the Financial Times acquisition by Nikkei which has been conducted low profile, we can expect much more participation in a potential Economist sale.

Pearson only owns 50% of The Economist, the remainder is owned by Families (Cadbury, Rothschild, Schroder, Agnelli and others) and Economist staff and former staff.

The Economist is governed by:

  • Trustees:
    • Baroness Bottomley of Nettlestone
    • Lord O’Donnell
    • Tim Clark
    • Bryan Sanderson
  • Board of Directors of 12 people

Therefore The Economist’s government structure enables The Economist’s independence, and acquiring Pearson’s 50% will not allow control of The Economist in the way acquiring 100% of Financial Times does.

How big is Nikkei? 6 times larger circulation than Financial Times! Larger than New York Times + Wall Street Journal combined!

Nihon Keizai Shinbun (Nikkei) has substantially larger distribution than  Wall Street Journal, New York Times or Financial Times
Nihon Keizai Shinbun (Nikkei) has substantially larger distribution than Wall Street Journal, New York Times or Financial Times

Japan’s media sector is very very large, and so is Nihon Keizai Shinbun Corporation.

Nihon Keizai Shinbun Corporation is best known in the west for the NIKKEI index, however this is only a very small part of Nihon Keizai Shinbun Corporation. At the core of Nihon Keizai Shinbun Corporation (Nikkei Inc) is the Nihon Keizai Shinbun (= Japan Economics Newspaper, Nikkei), which appears twice daily, and in terms of circulation is very much larger than New York Times, Wall Street Journal or Financial Times:


  • Nikkei: 2.77 million (morning) + 1.39 million (evening) + 0.43 million (digital) = 4.59 million
  • WSJ: 1.463 million (paper) + 0.734 million (digital) = 2.2 million
  • NYT: 0.868 million (paper) + 0.91 million (digital) = 1.8 million
  • FT: .225 million (paper) + .504 million (digital) = 0.73 million

Thus, Nikkei’s circulation is larger than WSJ + NYT combined, or more than 6 times larger than Financial Times’.

However, Nikkei is clearly behind in the transition from paper to digital.

Financial Times, 1/4 the size of the Nikkei Corporation in terms of sales

The Financial Times was founded on January 9, 1888.

Financial Times Group sales have increased from around £ 400 million (approx. US$ 620 million) in 2010 to around £ 450 million (approx. US$ 700 million) in FY 2013.

Nihon Keizai Shinbun Corporation (株式会社日本経済新聞社, Nikkei Inc.)

Nihon Keizai Shinbun Corporation (株式会社日本経済新聞社, Nikkei Inc.) was founded on August 11, 1911, but goes back to the newspaper ChuugaiBukkaShinpou (中外物価新報) which started on January 27, 1889, almost exactly one year after the Financial Times was founded.

Nihon Keizai Shinbun Corporation has the Nihon Keizai Shinbun (日本経済新聞) as its core, but owns and operates a very large number of other publishing and media businesses, including also a 31.46% holding in Televi Tokyo Holdings, one of Japan’s major TV based media groups.

  • Consolidated revenues: YEN 300.6 billion (US$ 2.4 billion) (FY2014)
  • Operating income: YEN 16.7 billion (US$ 0.135 billion) (FY2014)
  • Net income: YEN 10.26 billion (US$ 0.08 billion) (FY2014)
  • Employees: 7319 (Dec 31, 2014)

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TOSHIBA sells KONE holding for approx. US$ 0.95 billion


Toshiba sells its 4.6% holding in Finnish elevator company KONE

TOSHIBA sells KONE holding – fall-out from Toshiba’s accounting issues

TOSHIBA sells KONE holding: In the wake of Toshiba’s accounting issues, Toshiba announced the sale of its 24,186,720 shares, corresponding to a 4.6% holding in Finnish elevator company KONE for EURO 864.7 million (YEN 118 billion, US$ 0.95 billion).

Toshiba Elevators and Building Systems Corporation (TELC) and KONE had entered into a mutual capital investment alliance and exchange of Directors in December 2001.

On June 12, 2015 Toshiba announced a restatement of accounts, and announced the installment of an independent 3rd party committee headed by a former Chief Prosecutor of the Tokyo High Court. On July 20, 2015 the independent 3rd party committee announced income corrections with a total value of YEN 151.8 billion (US$ 1.22 billion).

Toshiba Elevator and Building Systems Corporation (TELC)

Toshiba Elevator and Building Systems Corporation (TELC) is a subsidiary of Japan’s Toshiba Corporation, established on February 16, 1967, the first escalator was installed in 1966, and the first elevator in 1967.

Toshiba Elevators produces advanced elevators, such as double decker elevators.

TELC has sales of approx. YEN 120 billion (US$ 1.2 billion) per year, and employs about 4700 people.


KONE was founded in 1910. KONE’s annual sales are on the order of EURO 7 billion, and KONE employs about 47,000 people. KONE’s shares are listed on NASDAQ OMX Helsinki Exchange.

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Rakuten continues worldwide acquisitions to globalize

acquired London based virtual fitting room mannequin venture

Rakuten, Japan’s largest e-commerce + e-finance group, is acquiring many companies around the world both to acquire technology, and to acquire e-commerce capabilities outside Japan in order to globalize. Find some of Rakuten’s recent acquisitions in Europe listed here:

On July 13, 2015 Rakuten acquired London based virtual fitting room venture, both to acquire technology and we assume, also to contribute to Rakuten’s globalization. – virtual fitting room, robot mannequins, and fit advisor was founded in 2010 by two Estonian friends, Paul Pällin and Heikki Haldre, in Estonia, and in 2012 the company moved its headquarters to London. helps consumers visualize how they might look like dressed with clothes from an e-commerce site, and turning around, allows e-retailers to collect data about their potential customers. offers a number of service versions ranging from “virtual fitting rooms” to “fit advisors”.

Once the customers has entered his/her body dimensions, weight and other data,’s web mannequins represent the customer’s body dimensions, and show how selected clothing would look like on a web mannequin with the customer’s body data. received US$ 14.3 million in founding in three rounds:

  • Seed: US$ 1.8 million (Sept 22, 2010)
    • Estonian Development Fund
  • Series A: US$ 7.2 million (April 17, 2013)
    • Conor Venture Partners
    • Entrepreneurs Fund
    • Fostergate Holdings
    • SmartCap AS
  • Venture: US$ 5.3 million (Oct 24, 2014)
    • Entrepreneurs Fund
    • SmartCap AS
    • James B Gambrell
  • Total = US$ 14.3 million


Rakuten was founded by Hiroshi Mikitani, and is Japan’s leading e-commerce and e-finance company developing a global footprint through a long series of acquisitions around the globe. Find some of Rakuten’s recent acquisitions in Europe listed here:

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Nidec acquires automotive pump company Geräte- und Pumpenbau GmbH Dr. Eugen Schmidt

nidec 日本電産株式会社

Electrical water pumps (EWP), electrical oil pumps (EOP)

“for everything that spins and moves”

Nidec acquires German pump manufacturer Geräte- und Pumpenbau GmbH Dr. Eugen Schmidt via the subsidiary Nidec Motors & Actuators (Germany) GmbH (“NMA(G)”) on February 2, 2015.

Geräte- und Pumpenbau GmbH Dr. Eugen Schmidt and subsidiaries have been renamed:

  • Germany: NIDEC GPM GmbH
  • Brazil: NIDEC GPM do Brasil Automotiva Ltda.
  • China: NIDEC GPM Automotive Pumps (Suzhou) Co. Ltd.
  • USA: NIDEC GPM North America Corporation

Geräte- und Pumpenbau GmbH Dr. Eugen Schmidt (GPM)

Geräte- und Pumpenbau GmbH Dr. Eugen Schmidt (GPM) develops, manufactures and sells electrical water pumps (EWP), electrical oil pumps (EOP), and modules for passenger cars and commercial vehicles.

Geräte- und Pumpenbau GmbH Dr. Eugen Schmidt has 1002 employees as of December 31, 2014.

NIDEC (日本電産株式会社)>

Founded in 1944 in Kyoto by Nagamori Shigenobu, and produces motors, machinery, optical parts, camera shutters and other electro-mechanical equipment.

Read our report on Japan’s electronics industry sector:
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Nidec acquires power generators manufacturer Motortecnica s.r.l.

nidec 日本電産株式会社

Nidec continues acquisitions in Europe in the motor and electrical equipment sector

Nidec: “for everything that spins and moves”

Nidec acquired the Italian electrical machinery construction and repair company Motortecnica s.r.l. on May 15, 2015 via its Italian subsidiary Nidec ASI S.p.A. (formerly, Ansaldo Sistemi Industriali S.p.A), which Nidec had acquired in May 2012.

Motortecnica s.r.l.

Motortecnica was established in 1989 in Salerno (Italy) by Antonio Iorio for the repair of electrical machines. Motortecnica has 77 employees and € 11 million in revenues for the fiscal year ending with December 31, 2014.

Motortecnica is focused on:

  • planning and production of electric machines such as motors and generators
  • construction of electric machine parts: stator coils, rotor coils, connections, whole rotors, whole stators
  • machining
  • diagnostics and repair of electric machines

Motortecnica moved to new headquarters in September 2013 workshops and factory includes:

  • Automatic brazing machine MPM 3000
  • CNC Machining units
  • Vertical lathes
  • Electric furnaces
  • Cut and skin
  • Impulse generators
  • Automatic Meter Zeiss
  • Alternating voltage generator 50 kV – 200 kVA
  • Ridgway Taping machine
  • Stator coil spindle-moulding machine
  • Roebel Transposition press
  • Instrumentation
  • Thermopresse
  • Laser cutter
  • Waterjet
  • Balancing machines maximum 30 tons

Motortecnica invests in equipment, technology and production and maintenance:

  • 2008: € 1 million
  • 2009: € 2 million
  • 2010: € 2.5 million
  • 2011: € 1.5 million
  • 2012: € 1 million
  • 2013: € 2 million
  • 2014: € 1.2 million

Nidec ASI S.p.A. (formerly, Ansaldo Sistemi Industriali S.p.A)

Nidec had acquired Ansaldo Sistemi Industriali S.p.A in May 2012, and renamed the company: Nidec ASI S.p.A. Nidec ASI’s business includes:

  • large industrial motors
  • generators
  • low and high voltage drives
  • industrial system automation and service with focus on the oil & gas, metals, renewable energy, marine and general industry sectors

Nidec was founded in 1944 in Kyoto by Nagamori Shigenobu, and produces motors, machinery, optical parts, camera shutters and other electro-mechanical equipment.

Read our report on Japan’s electronics industry sector to learn more about NIDEC and its place in Japan’s electronics industry sector:
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LIXIL announces losses of YEN 33.2 billion (US$ 265 million) due to Joyou AG’s insolvency filing


LIXIL (“Link to good living”) acquired approx. 70% of German listed Chinese subsidiary Joyou AG via the GROHE acquisition

Joyou AG files for bankruptcy

On January 21, 2014, LIXIL had acquired 87.5% of the German bath fixtures company GROHE Group (“Pure Freude am Wasser”).

The GROHE Group owns 72.3% of Joyou AG, thus Joyou AG became a LIXIL subsidiary in January 2014. Joyou AG had an IPO at the Frankfurter Stock Exchange in 2010.

Joyou AG recently filed for bankruptcy, and on June 3, 2015, LIXIL announced a restatement of accounts and projections, reducing income statements.

LIXIL announced income reductions due to the Joyou AG bankruptcy filing:

  • FY 2013 (ending March 31, 2014) net income reduced by: YEN 23.8 billion (US$ 191 million)
  • FY 2014 (ending March 31, 2015) net income reduced by: YEN 9.4 billion (US$ 76 million)
  • FY 2015 (ending March 31, 2016) net income reduced by: YEN 33 billion (US$ 26.5 million)
  • Total net income reductions (net losses): YEN 66.2 billion (US$ 532 million)

LIXIL plans to increase international business to half of its sales, and these losses represent a setback for LIXIL’s globalization plans – one of Japan’s new companies striving to overcome Japan’s “Galapagos effect”.


Lixil Corporation (“Link to Good Living”), TSE-Code 5938, manufactures building materials and housing equipment and operates home and home building centers.

LIXIL was formed on April 1, 2011 by the merger of:

  • Tostem Corporation
  • Inax Corporation
  • Shin Nikkei Company, Ltd.
  • Toyo Exterior Co., Ltd.
  • Sun Wave Corporation

and has been growing aggressively through acquisitions with the target to achieve 50% sales internationally outside Japan. In particular, jointly with the Development Bank of Japan (DBJ) LIXIL acquired a 87.5% stake in the German GROHE Group in 2013, the American Standard Brands (ABS), and the Permasteelisa Group of Italy.

To become global leaders in building materials and housing equipment, LIXIL has recently acquired:

  • American Standard Brands (ABS), in August 2013 for US$ 542 million
  • American Standard Asia Pacific, in August 2009
  • Permasteelisa Group of Italy in 2011
  • Shanghai Meite Curtain Wall System in 2011
  • LG-TOSTEM, strategic alliance formed in 2010
  • Haier-LIXIL, strategic alliance formed in 2011
  • jointly with the Development Bank of Japan (DBJ) LIXIL acquired a 87.5% stake in the German GROHE Group in 2013, which includes the Joyou AG

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