Corporate Governance FDI Japanese investments in EU M&A

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

Copyright (c) 2015 Eurotechnology Japan KK All Rights Reserved

Corporate Governance EU-Japan business Leadership

Sir Stephen Gomersall on UK-Japan relations & globalization

Sir Stephen Gomersall on corporate governance: Board Meetings should be like sparkling water – not like tea

Globalization and the art of tea

Hitachi – Japan’s most iconic corporation – under the leadership of Chairman & CEO, Hiroaki Nakanishi embarked on the “Smart Transformation Project” to globalize, to face a world where value creation has moved from manufacturing to innovation and solving customer’s problems, and to overcome long years of stagnation and low profits or losses, despite strong technology capabilities.

One of the most important brains behind Hitachi’s reinvention and globalization is Sir Stephen Gomersall. After a long and successful career as diplomat in the British Foreign Service, culminating in the years as British Ambassador to Japan 1999-2004, Sir Stephen joined Hitachi in 2004 as the first foreigner responsible for proposing and implementing Hitachi’s overseas regional strategy. Later Sir Stephen became responsible for all of Hitachi’s business in Europe as Chairman and Chief Executive of Hitachi Europe, and in addition Sir Stephen also served as Director on the Board of all Hitachi 2011-2014 overseeing all of Hitachi Group’s business as Board Director. With Sir Stephen’s leadership Hitachi achieved major business breakthroughs in Europe.

On March 5, 2015, Sir Stephen gave the “Princess Chichibu Memorial Lecture to the Japan British Society at Ueno Gakuen University in Tokyo with deep insights on Japan-British relations, on comparison of Britain’s and Japan’s position in the world, and on the challenges of globalization facing Japan and Japanese corporations – in particular Hitachi.

Sir Stephen is very clear that there is no alternative to globalization: “Globalisation poses tough challenges for Japanese companies, but is the only way forward”.

Read Sir Stephen’s lecture here:

Sir Stephen Gomersall: “Globalisation and the art of tea” (click the link above to read the full text of Sir Stephen’s Princess Chichibu Memorial Lecture)

Sir Stephen Gomersall

Stephen Gomersall was British Ambassador to Japan from 1999-2004, and Hitachi’s Chief Executive for Europe and subsequently Board Director from 2004-2014. He is now Adviser to the CEO, Hitachi Ltd.

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

Corporate Governance EU investments in Japan EU-Japan business Japanese investments in EU

Toshiba Elevator and Building Systems Corporation (TELC) and KONE enter into capital alliance

Toshiba Elevators and Finnish KONE invest in each other

by Gerhard Fasol

Toshiba Elevators sends one Director to KONE’s Board, and KONE sends two Directors to Toshiba Elevator’s Board

On December 20, 2001, Toshiba Elevator and KONE announced, that in March 2002,:

  • TELC will issue new shares and increase its capital, and KONE will acquire a 20% holding of the new capitalization
  • TELC will acquire 5% of KONE’s shares
  • TELC will nominate one Director to the Board of Directors of KONE
  • KONE will nominate two Directors to the Board of Directors of TELC

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.

Japan electronics industries – mono zukuri.

Copyright (c) 2009-2015 Eurotechnology Japan KK All Rights Reserved