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Asahi Kasei Medical acquires Austrian ViruSure Forschung und Entwicklung GmbH

by Gerhard Fasol (31 October 2019)

Asahi Kasei Medical announced the acquisition of Austrian contract research firm ViruSure Forschung und Entwicklung GmbH based in Vienna (Austria).

ViruSure Forschung und Entwicklung GmbH

  • Operations Director: Dr Andrew C Bailey,
  • Finance and Administration Director: Dr Alexander Vodopivec
  • Team members: approx 45 (as of Sept 2018)
  • Investors: PP Capital AG
  • http://www.virusure.com

Asahi Kasei Medical KK (旭化成メディカル株式会社)

Business divisions

  • Dialysis: global leader driving progress in dialysis therapy
  • Therapeutic Aphaeresis: making therapeutic aphaeresis available worldwide to expand treatment options and possibilities
  • Blood transfusion: reducing blood transfusion risk and heightening trust in healthcare
  • Bio-processes: expanding availability of high-quality drugs by enhancing safety in biopharmaceutical production

Copyright 2019 Eurotechnology Japan KK. All Rights Reserved.

Categories
Japanese investments in EU M&A

NEC to acquire Denmark’s largest IT company KMD Holding ApS for about 8 billion Danish Kroner (approx. US$ 1.2 billion)

NEC Corporation announced on December 27, 2018 the acquisition of Denmark’s largest IT company, KMD Holding ApS, the holding company of KMD A/S for about 8 billion Danish Kroner (approx. US$ 1.2 billion) from the private equity group Advent International. This acquisition is in line with NEC‘s “Mid-term Management Plan 2020” to shift NEC towards horizontal service platform businesses. The transaction is expected to be completed by end of February 2019.KMD (originally Kommunedata)

KMD (originally Kommunedata)

  • founded in 1972 by the merger of municipal IT centers.
  • 1972 – 2009 owned by the national association of municipalities (Kommunernes Landsforening (KL))
  • 2009 sold to EQT Partners (85%) and Arbejdsmarkedets Tillægspension (ATP) (15%) for DKK 2 billion (approx. US$ 310 million). During 2019-2012 KMD was transformed from a government sector organization to a private sector company.
  • 2012 EQT and ATP sold KMD to Advent International
  • 2018/2019 Advent International sold KMD to NEC for about 8 billion Danish Kroner (approx. US$ 1.2 billion)
  • Employees: 3000
  • Revenues: DKK 4.7 billion (2013)
  • Net income: DKK 64 million (2013)

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Categories
Japanese investments in EU M&A

Daikin acquires AHT for €881m (approx. 114.5 billion YEN)

Daikin Industries Ltd acquires Austria’s AHT Cooling Systems for €881m (approx. 114.5 billion YEN)

by Gerhard Fasol

World’s largest air-conditioning equipment maker expands to Europe

On Monday 26 November 2018 Daikin Industries Ltd announced the planned acquisition of AHT Cooling Systems for €881m (approx. 100 billion YEN).

Daikin Industries Ltd [TYO:6367], slogan: “The Future in Your Hand”

Daikin Industries Ltd was founded in 1924 as Osaka Kinzoku Kogpyosho LP by Akira Yamada in Osaka.
1963 the name was changed to Daikin Kogyo Co Ltd, and
in 1982 the name was changed to Daikin Industries Ltd.

AHT Cooling Systems GmbH

AHT is an abbreviation for Austria Haustechnik (Austrian home technologies), and its headquarters are in Rottenmann (Steiermark, Austria). AHT produces refrigerators and freezers, 60% of sales are refrigerators and freezers for super markets. German discount supermarket giants Aldi and Lidl are among AHT’s customers.

In 1998 AHT listed with an IPO on the Vienna Stock Exchange.
In 2003, AHT was fully acquired by Quadriga Capital for € 35 Million and delisted.
Quadriga sold AHT to Germany Investment Firm Equita.
In 2006, Quadriga acquired AHT back from Equita, and in Mai 2013 was reported to seek selling AHT for at least € 450 Million.

Annual sales:
€ 222.7 Million (2011)
€ 380 Million (2015)

Employees: 1250 (global)
CEO: Thomas Babacan
COO: Frank Elsen

Copyright (c) 2018 Eurotechnology Japan KK All Rights Reserved

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Japanese investments in EU Renewable energy

Irish wind energy €300m investment by Sojitz, Mitsubishi UFJ Lease & Finance and Kansai Electric Power Corporation

Japanese consortium of trading company Sojitz, Mitsubishi UFJ Lease & Finance and Kansai Electric invest in five Irish wind farms

by Gerhard Fasol

Irish wind energy €300m investment

Irish wind energy investments were announced by trading company Sojitz, Mitsubishi UFJ Lease & Finance and Kansai Electric Power Corporation.

Sojitz, Mitsubishi UFJ Lease & Finance and Kansai Electric Power Corporation have established the special purpose company ShaMrocK Wind Limited.

ShaMrocK Wind Limited will acquire 60% of shares in Evalair Wind Limited from Invisible Energy for a reported €300m, valuing Evalair Wind Limited at €500m.

Note the interesting composition of the Japanese investment joint venture ShaMrocK Wind Limited: the Japanese trading company Sojitz, the Mitsubishi group leasing unit, and Kansai Electric Power Corporation. In this combination, Sojitz contributes international business experience and know-how, and private-equity type investment know-how, Mitsubishi’s leasing unit provides financing know-how, while Kansai Electric Power contributes electricity operator know-how. At the same time, the Japanese consortium gains wind power knowledge, since wind power development in Japan is in relatively earlier stages of development than in Europe, see: https://www.eurotechnology.com/store/j_renewable/

Evalair Wind Limited

Evalair Wind Limited is a wind power plant operating company.

Directors: Michael Murnane, David Murnane

Share holders

  • ShaMrocK Limited: 60%
  • Invis Energy (JV between Michael Murnane, Craydel Group, HG Capital): 40%

Invis/Evalair Wind power: 5 plants, 223.4MW, 97 turbines

  1. Knocknagoum, County Kerry
    • 44.4 MW
    • turbines: 26 (4 x Vestas V90 2MW; 5 x Vestas V90 3MW; 6 x Vestas V80 2MW; 11 x Vestas V52 0.85MW)
    • Energy yield: 133.1 GWh/Year
    • Capacity factor: 34%
  2. Leitir Guingaid Leitir Peic, County Galway
    • 44.0 MW
    • turbines: 17 (10 x Enercon E82 2.3MW (LG); 7 x Enercon E82 3MW (LP))
    • Energy yield: 134.4 GWh/Year
    • Capacity factor: 35%
  3. Knockduff, County Cork
    • 65.0 MW
    • turbines: 26 (Nordex N90 2.5MW)
    • Energy yield: 229.9 GWh/Year
    • Capacity factor: 40%
  4. Killaveenoge, County Cork
    • 25.0 MW
    • turbines: 10 (Nordex N90 2.5MW)
    • Energy yield: 80.5 GWh/Year
    • Capacity factor: 37%
  5. Slievecallan West, County Clare
    • 45.0 MW
    • turbines: 18 (Nordex N90 2.5MW)
    • Energy yield: 170.0 GWh/Year
    • Capacity factor: 43%

ShaMrocK Wind Limited

ShaMrocK Wind Limited is a special purpose company to invest in Evalair Ltd.

Headquarter: London
Incorporated: 24 July 2017

Shareholding:

  • Mirai Power Europe Limited: 48.8%
    • Sojitz Corporation: 75%
    • Sojitz Europe plc: 25%
  • KPIC Netherlands B.V (wholly owned by Kansai Electric Power Co., Inc.): 40%
  • Mitsubishi UFJ Lease & Finance Company Limited: 11.2%

Renewable energy Japan – research report

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Categories
FDI Japanese investments in EU M&A

Dentsu acquires Gleam Futures via Dentsu Aegis Network as a cultural bridge

Dentsu uses London based Dentsu Aegis Network as a cultural bridge to acquire representation of about 40 YouTube stars

Dentsu acquires Gleam Futures: invests to acquire 90% ownership

Dentsu acquires Gleam Futures, who “develop, monetize & protect” digital-first talent, ie mainly YouTube focused stars.

Japanese companies have a dramatically different culture than Western, European or US companies, and Dentsu is one of Japan’s more traditional companies, at the same time home to Japanese creative talent.

To bridge this gap in cultures, Dentsu acquired the French/UK company Aegis Group plc on 5 July 2012, creating Dentsu Aegis Network. Dentsu has used Dentsu Aegis Network as a bridge head for many acquisitions in Europe and the Mediterranean are, bridging cultural differences.

Gleam Futures: “We manage digital-first talent”

Gleam Futures describe their business as “we develop, monetize & protect” digital-first talent, e.g. YouTube stars.

  • Established: 2010
  • Employees: 37
  • Talents: 40
  • Combined subscriber base: approx. 60 million
  • Revenues: UK Pounds 4.35 million (Fiscal Year ending Dec 2016
  • Founder & CEO: Dominic Smales

Zoella

11,838,878 subscribers as of 22 June 2017

Caspar Lee

7,197,168 subscribers as of 22 June 2017

Marcus Butler

4,611,346 subscribers as of 22 June 2017

Total: approx. 60 million subscribers

Copyright (c) 2017 Eurotechnology Japan KK All Rights Reserved

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M&A

Roche acquires Chugai Pharmaceutical controlling stake, expanding in Japan, the world’s second largest pharmaceutical market

Japan’s pharmaceutical market is approx. US$ 80 billion – US$ 120 billion, approx. 10% of the global pharmaceutical market

by Gerhard Fasol

Roche acquires Chugai: Roche KK merges into Chugai in a carefully structured process, with Chugai the surviving company

Roche acquires Chugai in a series of carefully crafted transactions, to expand in the world’s second largest pharmaceutical market, Japan. Japan’s pharmaceutical market size is estimated at YEN 8000 – 1,200 billion (US$ 80 billion – US$ 120 billion), depending on the source and methods of estimation, corresponding to about 10% of the global pharmaceutical markets.

Growth of Japan’s pharmaceutical markets are about 2% per year, thus expected to grow to about US$ 130 billion by 2018. Different studies give different estimates for the size of Japan’s pharmaceutical market.

Roche acquires Chugai. First stage. December 2001/October 2002. Roche acquires 50.1% of Chugai and merges Nippon Roche KK into Chugai

In 2001, Roche and Chugai agreed for Roche to acquire 50.1% of Chugai for YEN 155 – 198 billion (US$ 1.23 – 1.58 billion). Basic agreement was signed in December 2001.

The merger of Nippon Roche into Chugai, which Chugai the surviving company and the full start of the alliance was in October 2002. Chugai maintains autonomous management, and listing on the Tokyo Stock Exchange.

Roche and Chugai entered into a double licensing agreement, where Roche licenses products from Chugai for international distribution, and vv Chugai licenses products from Roche for distribution in Japan:

  • Chugai has first refusal rights to develop and sell Roche products in Japan
  • Roche has first refusal rights to develop and sell Chugai products in Japan, with some territorial exceptions

Also agreed were limits on Roche’s shareholding in Chugai:

  • 1 Oct 2002 – 30 Sept 2007: maximum shareholding 50.1%
  • 1 Oct 2007 – 30 Sept 2012: maximum shareholding 59.9%
  • from 1 Oct 2012: Roche will cooperate to maintain Chugai’s stock market listing in Japan

Roche acquires Chugai. Second stage. 2008 Roche increases share holding in Chugai to 59.9%

Roche acquires Chugai. Third stage: Roche currently holds 61.62% of Chugai

Although there have been press reports speculating that Roche plans to acquire all of Chugai, currently Roche holds 61.62% of Chugai.

Chugai Pharmaceutical Company Ltd (中外製薬株式会社)

Chugai Pharmaceutical Company Ltd is (中外製薬株式会社) listed on the Tokyo Stock Exchange, Code 4519.

Market cap is YEN 2,360 billion (approx. US$ 24 billion) as of 26 May 2017. Chugai employs 7245 people as of 31 December 2016, achieving sales/revenues of YEN 492 billion (approx. US$ 5 billion).

Chugai was founded on 10 March 1925, and established in the current form on 8 March 1943.

Roche in Japan

  • 1899: Roche is the first Western pharmaceutical company to start business in Japan, establishes a network of sales representatives
  • 1904: Karl Rhode Company becomes distributor of Roche in Japan
  • 7 July 1924: Roche incorporates a subsidiary in Japan, Roche Gomeikaisha
  • 1924-1939: Dr Alice Keller, Head of Roche Japan
  • 1932: Nippon Roche KK founded
  • 2001/2002: Roche acquires 50.1% of Chugai, merges Nippon Roche KK into Chugai. Chugai is the surviving company, and remains under autonomous management and listed on the Tokyo Stock Exchange

Copyright (c) 2017 Eurotechnology Japan KK All Rights Reserved

Categories
Japanese investments in EU M&A

ISOLITE acquired by Hitachi Chemical from private equity fund HQ Equita and others

Private equity fund HQ Equita had acquired ISOLITE in 2010, now sells to Hitachi Chemical

by Gerhard Fasol

ISOLITE acquired by Hitachi Chemical to build global speciality insulation materials group

ISOLITE acquired by Hitachi Chemical from private equity fund HQ Equita, as announced on 27 and 28 April 2017.

Isolite – High Temperature Solutions

Isolite produces and sells a range of insulation materials and solutions specifically for the high temperature sector up to 1600C for the automotive, aircraft and other industrial sectors.

  • Isolite GmbH
  • CEO: Christian Eck
  • founded: 1997
  • employees: 410
  • patents: 12
  • manufacture and sales of thermal insulations for automobiles, aircraft, and other industrial applications
  • http://isolite.de/

HQ Equita

HQ Equita is a mid-cap buyout firm of HQ Capital, related to the German Harald Quandt Family Office.

More about Hitachi and Japan’s electronics industries

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EU investments in Japan M&A

Sanofi acquires SSP (エスエス製薬株式会社) from Boehringer Ingelheim in a global asset swap

Japan’s pharmaceutical market is approx. US$ 80 billion – US$ 120 billion, approx. 10% of the global pharmaceutical market

by Gerhard Fasol

Sanofi acquires SSP (エスエス製薬株式会社), a Japanese OTC pharmaceutical company, founded as a pharmacy in Tokyo in 1765

Boehringer Ingelheim had acquired SSP (エスエス製薬株式会社), a Japanese OTC pharma company founded originally in 1765 as a pharmacy in Yaesu, Tokyo, starting with business cooperation, followed by staged investment over a period of five years, starting in 1995, followed by a Take-Over-Bid and delisting of SSP from the Tokyo Stock Exchange in 2010.

For details of Boehringer’s acquisition of SSP, see: http://eu-japan.com/2010/12/boehringer-ingelheim-ssp/

On 1 January 2017 as part of a global asset swap of Boehringer Ingelheim with Sanofi, SSP becomes a subsidiary of the French pharmaceutical group Sanofi (サノフィ株式会社)

SSP (エスエス製薬株式会社), founded in 1765

History, and acquisition steps by Boehringer Ingelheim:

  • SSP (エスエス製薬株式会社) was founded in 1765 as a pharmacy in Yaesu, Tokyo
  • On 29 October 1927 the company was incorporated as (株)瓢箪屋薬房
  • In 1940 the company name was changed to (エスエス製薬株式会社)
  • 1969 IPO on the 2nd section of the Tokyo Stock Exchange
  • 1971 IPO on the 1st section of the Tokyo Stock Exchange
  • 1995-1996 Boehringer Ingelheim invests in SSP, and becomes largest share holder
  • 2001 Boehringer Ingelheim increases shareholding to above 50%
  • 15 February 2010 Boehringer Ingelheim Japan Investment GK (ベーリンガーインゲルハイム・ジャパン・インベストメント合同会社) issues a Take-Over-Bid (TOB), which is concluded on 15 April 2010, resulting in Boehringer Ingelheim Investment Japan acquiring a total of 93% of SSP shares.
  • 16 July 2010 SSP is delisted from Tokyo Stock Exchange
  • 1 October 2010 merger with Boehringer Ingelheim Japan Investment GK (ベーリンガーインゲルハイム・ジャパン・インベストメント合同会社)
  • 19 November 2010 merger with BI Nippon Invest GK (BIニッポンインベスト合同会社)
  • 19 November 2010 becomes subsidiary of Boehringer Ingelheim Japan KK (ベーリンガーインゲルハイムジャパン株式会社)
  • 1 January 2017 as part of a global asset swap of Boehringer Ingelheim with Sanofi, SSP becomes a subsidiary of the French pharmaceutical group Sanofi (サノフィ株式会社)

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M&A

Asahi Group Holdings acquire five east European beer brands from Anheuser-Busch InBev

Asahi Group Holdings agreed to acquire five European beer brands for €7.3 billion:

Asahi Group Holdings (アサヒグループホールディングス株式会社)

  • founded in 1889 in Osaka as the Osaka Beer Company (大阪麦酒会社)
  • listed on Tokyo Stock Exchange (TSE2502)
  • with about 38% market share, the largest of Japan’s top four breweries and beverage groups
  • https://www.asahigroup-holdings.com/
  • Employees: 287 (at Holding Company level)
  • net sales (FY 2018) ¥2120.3 billion (US$ 21 billion)

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Uncategorized

Asahi Group Holdings acquires Peroni Nastro Azurro, Grolsch and Meantime

Asahi Group Holdings agreed to acquire Miller Brands UK for an acquisition price of €2550 million (approx. US$ 2.5 billion) to become Asahi UK, as part of Asahi Group’s Europe strategy:

Asahi Group Holdings (アサヒグループホールディングス株式会社)

  • founded in 1889 in Osaka as the Osaka Beer Company (大阪麦酒会社)
  • listed on Tokyo Stock Exchange (TSE2502)
  • with about 38% market share, the largest of Japan’s top four breweries and beverage groups
  • https://www.asahigroup-holdings.com/
  • Employees: 287 (at Holding Company level)
  • net sales (FY 2018) ¥2120.3 billion (US$ 21 billion)

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Categories
Japanese investments in EU M&A

Nippon Electric Glass acquires PPG’s European fibre glass operations

Nippon Electric Glass acquires PPG glass fibre manufacturing and R&D in Hoogezand (Netherlands) and Wigan (UK)

Reinforcement materials for transportation, energy, infrastructure and consumer markets

On June 20, 2016 PPG and Nippon Electric Glass (NEG, TYO:5214) announced that Nippon Electric Glass will acquire PPG’s European fibre glass operations, subject to employee consultations, regulatory and other approvals. The acquisitions were completed on October 3, 2016.

PPG’s European Fibre glass operations employ approximately 550 people, and achieved about EURO 150 million in sales in 2015.

Nippon Electric Glass aims to expand its glass fibre business:

  1. by acquiring production facilities in Europe
  2. increasing the chopped glass fibre strands business
  3. adding new glass fibre product lines

Total assets: approx. € 90 million
Total annual revenues: approx. € 150 million

PPG Industries Fiber Glass B.V., Westerbroek / Hoogezand

Energieweg 3, 9608 Westerbroek, Netherlands

Main products: chopped strands for reinforced plastics
Main markets: composite materials for auto parts

New name after acquisition: Electric Glass Fiber NL BV
Location: Hoogezand, Netherlands
Capital: € 16 million
Established: April 28, 1961
Ownership: 100% Nippon Electric Glass Co Ltd.

PPG Industries (UK) Ltd

132 Leigh Road, Hindley Green, Wigan, Lancashire WN2 4XG, United Kingdom, United Kingdom

Main products: direct rovings for reinforced plastics
Main markets: blades for wind power generation, composite materials for auto parts
approximately 220 employees (plus temporary staff)

New name after acquisition: Electric Glass Fiber UK Ltd.
Capital: UKL 30 million
Established: July 8, 2016
Ownership: 100% Nippon Electric Glass Co Ltd.

Seller: PPG (Pittsburgh Plate Glass)

Pittsburgh Plate Glass (PPG) was founded in 1883 in Pittsburgh, Pennsylvania, and today operates about 156 factories globally and in 2015 achieved revenues of around US$ 15.3 billion.

Acquirer: Nippon Electric Glass KK (NEG)

Nippon Electric Glass KK (NEG) was established in 1944 with an investment from NEC Corporation and others, and separated from NEC, and was incorporated as an independent company in 1949.

Today NEG has about US$ 2.4 billion in annual revenues and produces about 20% of the global production of glass for liquid crystal displays, and other speciality glass products.

Copyright (c) 2016 Eurotechnology Japan KK All Rights Reserved

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FDI Japanese investments in EU M&A R&D Science & Technology

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)

by Gerhard Fasol

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.

SoftBank today and 300 year vision report:

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Categories
FDI Japanese investments in EU M&A Science & Technology

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

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

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Categories
EU investments in Japan FDI Japanese investments in EU M&A

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

“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

Suzuki Volkswagen divorce. "Mr. Suzuki didn't want to be a VW employee" (Prof. Dudenhoeffer via Bloomberg). What can we learn?
Suzuki Volkswagen divorce. “Mr. Suzuki didn’t want to be a VW employee” (Prof. Dudenhoeffer via Bloomberg). What can we learn?

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.

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Categories
FDI Japanese investments in EU R&D

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

by Gerhard Fasol

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.

More about Japan’s electronics and electrical machinery industries

Report on Japan’s electronics industry sector (approx. 237 pages, pdf file)

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

Categories
Japanese investments in EU M&A

Mitsui Sumitomo Insurance Company to acquire UK insurance company Amlin

Amlin is an insurer operating the second largest syndicate in London’s Lloyd’s insurance market

by Gerhard Fasol

Mitsui Sumitomo Insurance Company acquires Amlin for 2.5 billion pounds (approx. US$ 3.85 billion or ¥642 billion)

On Tuesday, September 8, 2015, Mitsui Sumitomo Insurance Company announced the planned acquisition of London based insurer Amlin plc for 2.5 billion pounds (approx. US$ 3.85 billion or ¥642 billion).

Since Amlin plc is traded on the London Stock Exchange, the acquisition process needs to follow a precisely defined process.

Mitsui Sumitomo Insurance Company offered to acquire 100% of shares (517,658,935 shares), offering 670 pence per common share.

The acquisition is expected to close between January and March 2016.

There has been a string of acquisitions in Europe by Japanese insurance companies, which you can find in our Japan to EU M&A register. Some examples are:

In addition, all major Japanese insurers are also active on London’s Lloyds Insurance market, and in other ways in Europe. And these deals are in addition to the acquisition of StanCorp Financial Group by Meiji Yasuda Life Insurance for US$ 5 billion, and HCC Insurance for US$ 7.5 billion by Tokyo Marine.

Mitsui Sumitomo Insurance Company

Mitsui Sumitomo Insurance Company is the company which has announced the planned acquisition of Amlin plc.

Mitsui Sumitomo Insurance Company was founded on October 21, 1918, and has about 14,859 employees on non-consolidate basis.

Mitsui Sumitomo Insurance Company was listed on the Tokyo Stock Exchange (Code: 8725), but was delisted on March 26, 2008, and became a 100% owned subsidiary of MS&AD Insurance Group Holdings KK, which was founded on April 1, 2008, and which assumed the Stock Exchange Code 8725.

Mitsui Sumitomo Insurance Company’s history goes back to 1893, when the Osaka Insurance Company was established.

Mitsui Sumitomo Insurance Group Holdings, Inc.

The Mitsui Sumitomo Insurance Group Holdings, Inc. was founded on April 1, 2008.

On April 1, 2010, The Mitsui Sumitomo Insurance Group Holdings, Inc. was merged with Aioi Insurance and with Nissay Dowa General Insurance Co., Ltd., and the resulting group was renamed: MS&AD Insurance Group Holdings KK.

MS&AD Insurance Group Holdings KK

MS&AD Insurance Group Holdings KK (Tokyo Stock Exchange Code = 8725) was founded on April 1, 2008.

MS&AD Insurance Group Holdings KK companies include:

Amlin plc

Amlin plc was founded on September 28, 1998 and has about 1900 employees.

Amlin plc’s business is a global insurer and reinsurer centered on Lloyd’s market in London. Amlin operates the second largest syndicate in Lloyd’s.

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

Categories
FDI Japanese investments in EU M&A

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.

by Gerhard Fasol

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:

Circulation

  • 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)

You need to understand Japan’s huge media industry sector?

Read our report on Japan’s Media (approx. 200 pages, pdf file)

Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

Categories
EU investments in Japan EU-Japan business FDI Japanese investments in EU M&A

TOSHIBA sells KONE holding for approx. US$ 0.95 billion

Toshiba sells its 4.6% holding in Finnish elevator company KONE

by Gerhard Fasol

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

Toshiba
Toshiba

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

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

Categories
FDI Japanese investments in EU

Fits.me acquired by Rakuten

Rakuten continues worldwide acquisitions to globalize

by Gerhard Fasol

acquired London based virtual fitting room mannequin venture Fits.me

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: http://eu-japan.com/?s=rakuten

On July 13, 2015 Rakuten acquired London based virtual fitting room venture fits.me, both to acquire technology and we assume, also to contribute to Rakuten’s globalization.

Fits.me – virtual fitting room, robot mannequins, and fit advisor

Fits.me 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.

Fits.me helps consumers visualize how they might look like dressed with clothes from an e-commerce site, and turning around, Fits.me allows e-retailers to collect data about their potential customers.

Fits.me 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, Fits.me’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.

Fits.me 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

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: http://eu-japan.com/?s=rakuten

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Japanese investments in EU M&A

Quipper acquired by Japanese media giant Recruit for US$ 39 million

EdTech venture Quipper was founded 2010 by DeNA veteran Masayuki Watanabe (渡辺雅之) in London

by Gerhard Fasol

Recruit expands from classified-type magazine sites into education

On April 1, 2015, Japanese media giant Recruit acquired London based but largely Japanese managed EdTech venture Quipper for US$ 39 million, providing good returns for three investors, Atomico, Benesse and Globis Capital Partners, who had invested a total of US$ 10.1 million over the period 2011-2014.

Quipper represents a new class of global ventures: largely Japanese entrepreneurs and managers founded a venture in London, taking advantage of London’s global business and venture platform, and especially UK’s very strong education infrastructure and education industry, and developing global EdTech business.

Quipper

Quipper is an EdTech venture developing and marketing quiz based e-learning apps platform for smartphones.

Learning content is provided by teachers, experts, publishing houses, teachers and others.

Founded on December 1, 2010 in London (UK).

US$ 10.1 million funding was invested by three investors in three stages:

  • Seed, Oct 1, 2011: £ 0.4 million by Atomico
  • Series A, May 18, 2012: £ 2.3 million by Globis Capital Partners and Atomico
  • Series A, March 6, 2014: $5.8 million by Atomico and Benesse
  • Total: US$ 10.1 million

Current Quipper team is predominantly Japanese:

  • Masayuki Watanabe (渡辺雅之), CEO
  • Masatomo Nakano, CTO
  • Takuya Nomma, Marketing Director
  • Yosuke Arakaki, Yuta Funase, Joseph Ganderson, Ryan Guerrero, Yusuke Kaneko, Takeyoshi Mizusawa, Satoru Tanabe, Mai Ueno, Annette Tsuda, Business Development

Recruit

Recruit is a Japanese media company with its own original innovative business model. Recruit started with job advertising magazines, and has developed a wide range of advertising platforms for job search, weddings, used cars, and many other areas. Find a description and analysis of Recruit in our Japan Media Report.

Japan’s media markets – research report

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FDI Japanese investments in EU M&A

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

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

“for everything that spins and moves”

by Gerhard Fasol

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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FDI Japanese investments in EU M&A

Nidec acquires power generators manufacturer Motortecnica s.r.l.

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 (日本電産株式会社)

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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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

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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games Japanese investments in EU mobile

Supercell: Softbank increases ownership to 73.2%

Supercell valued at US$ 5.3 billion

Softbank and GungHo jointly acquired 51% in October 2013 for US$ 1.5 billion

by Gerhard Fasol

On June 1, 2015, SoftBank announced an investment to increase the ownership of Supercell stock from 50.5% to 73.2% on a fully diluted basis. This transaction had closed on May 29, 2015.

While Softbank did not officially disclose details of this transaction, VentureBeat/GamesBeat reported that SoftBank this time paid US$ 1.2 billion for this additional 22.7% of ownership. Thus by dividing US$ 1.2 billion by 22.7% we can calculate a market value of US$ 5.3 billion.

Supercell is reported to have achieved revenues of US$ 1.7 billion and income of US$ 0.5 billion in 2014.

SoftBank and GungHo together acquired 51% of Supercell for US$ 1.5 billion in October 2013: SoftBank invested US$ 1.2 billion (80%), while GungHo invested US$ 306 million (20%). GungHo sold its share to SoftBank in August 2014.

Clash of Clans ranked No. 7 top grossing in Japan’s iOS app store

Supercell achieved an important position in Japan’s smartphone game market:

Currently Clash of Clans is ranked No. 7 top grossing app in Japan’s iOS app store, and No. 6 in the Games category (source: Apple App Store ranking).

According to AppAnnie, on June 1, 2015, Supercell’s games Clash of Clans, Hay Day and Boom Beach were ranked as the No. 1 top grossing games for iPad in 149, 128 and 112 countries respectively.

Learn about Japan’s game makers and markets – our report

pdf-file, approx. 398 pages, 141 Figures, 95 Photos, 98 tables, 5 Mbyte

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Uncategorized

Yanmar to acquire 70% of Himoinsa

Diesel engine maker Yanmar to partner with generator manufacturer Himoinsa

Yanmar and Himoinsa to provide solutions for energy markets including cogeneration

On April 27, 2015, diesel engine maker Yanmar and electricity generator maker Himoinsa announced a partnership, including Yanmar to acquire 70% of Himoinsa, to strengthen their solution business for energy markets including cogeneration.

Both Yanmar and Himoinsa are privately held companies, so the amount of information released is quite thin, however we can expect this partnership to help Himoinsa to strengthen business in Asia, where Himoinsa is active since 1999 and currently achieves about 20% of business, while Yanmar will be able to strengthen business particularly in the Hispanic parts of the world.

On the technical and product side, we can expect a range of jointly developed products.

Yanmar has supplied diesel engines for Himoinsa generators since 2006.

Himoinsa – “The Energy”

Himoinsa was founded in 1982, and is based in San Javier, Murcia, Spain.

Himoinsa manufactures and markets products including:

  • diesel generators from 3 kiloWatt to 3 MegaWatt
  • fas generators from 3 kiloWatt to 3 MegaWatt
  • diesel generators from 8 Watt to 3.5 MegaWatt
  • lighting towers up to 1.32 Mega-Lumen

Annual revenues are on the order of US$ 300 million:

  • 50% of revenues in Europe and Africa
  • 30% of revenues in the Americas
  • 20% of revenues in Asia Pacific, where Himoinsa started in 1999.

Currently nine production centers, including:

  • Headquarters and main factory in Murcia, Spain, including R&D Centre.
  • Plant Metal 1, Murcia
  • Plant Metal 2, Murcia
  • Himoinsa, China in Changzhou (Jiangsu)
  • Hipower Systems, Lenexa, Kansas, USA
  • Genelec S.A.S, Villefranche sur saone, France.
  • Control & Switchgear Himoinsa PVT Ltd, production site at Pantnagar, Uttaranchal, India.
  • Brazil
  • Argentina

Yanmar Holdings KK (ヤンマーホールディングス株式会社) – “Solutioneering Together”

Yanmar Holdings KK (ヤンマーホールディングス株式会社) is privately held:

  • Consolidated revenues: YEN 650.7 billion (US$ 5 billion) FY 2013, ended March 31, 2014
  • Consolidated operating income: YEN 44.8 billion (US$ 0.37 billion) FY 2013, ended March 31, 2014
  • Group employees: 16,678 as of March 31, 2014

Yamaoka Magokichi (山岡 孫吉, March 22, 1888 – March 8, 1962) founded the company “Yamaoka Engine Manufacturing” (山岡発動機工作所) in March 1912, trading in gas engines. In 1921 the brand/trademark Yanmar (ヤンマー) was created.

In 1920 the company began to produce small oil engines for agricultural applications.

In 1947 the company began to produced small diesel engines for fishing boats, and in 1952, the company name was changed to Yanmar Diesel KK (ヤンマーディーゼル株式会社).

In 2010 the company adopted the slogan “Solutioneering Together”.

On April 1, 2013, the group was restructured under the holding company Yanmar Holdings KK (ヤンマーホールディングス株式会社) .

Yanmar produces mainly diesel engines, and also a range of related products including:

  • fishing boats
  • hulls for ships
  • tractors
  • combine harvesters
  • rice-planting machines
  • gas heat pumps
  • snow throwers
  • mini excavators
  • portable diesel generators
  • and other equipment and machinery

Unmanned aerial vehicles – UAV, drones

Since approx. 1995, Yanmar also develops and markets unmanned aerial vehicles (UAV, drones) including:

  • Yanmar YH300 SL
  • Yanmar AYH-3

Cogeneration

Himoinsa and Yanmar jointly offer a range of cogeneration solutions.

Cogeneration is the joint production of heat and electricity and can save substantial amounts of primary energy compared to the separate production of heat and electricity in separate plants.

Yanmar advertising and branding

ヤン坊マー坊天気予報 (Yanbou and Mabou weather forecast)

In Japan Yanmar became famous for very characteristic and successful advertising.

Yanmar used two mascots (Yanbou and Mabou) for sponsoring weather forecast (ヤン坊マー坊天気予報) on TV between June 1, 1959 and March 31, 2014:

  • ヤン坊 (ヤンぼう, Yanbou)
  • マー坊 (マーぼう, Mabou)

In July 2013 the official Yanbou Mabou Weatherforecast site was closed – read the official notice here.

You can find this branding explained on Yanmar’s website here.

And you can listen to Yanmar’s famous TV Commercial song here.

And have all your questions answered here.

Look for yourself

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FDI Japanese investments in EU M&A

Domino Printing Sciences plc to be acquired by Brother Industries

Transition from analog printing to digital printing drove coding and marking printer Domino to partner with a stronger company

Domino valued at 1.03 billion pounds (US$ 1.5 billion)

97% of today’s printing is analog, however there is a transition now to digital printing. Domino Printing Sciences is specialized on analog printing and now transitioning to digital printing, and needed a financially stronger partner to support increasing R&D costs and to finance expansion into the rapidly growing digital printing markets.

Brother Industries announced its intention to acquire publicly traded Domino Printing Sciences plc following the acquisition process prescribed in the UK for a total of around 1.03 billion pounds.

Domino Printing Sciences plc. “Domino. Do more.”

Domino Printing Sciences plc was founded as a spin-out from Cambridge Consultants in 1978 by Graeme Minto in Cambridge, UK, building on continuous inkjet printing technology (CIJ), and today has about 2300 employees and annual revenues of UKL 350 million (= US$ 526 million).

Domino explains its business in a series of infographics on Pin-it:

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FDI Japanese investments in EU M&A

abaGada, Israeli digital performance agency, acquired by Dentsu and to be rebranded as iProspect

Dentsu continues acquisition of digital and mobile agencies in Europe and Israel

To overcome cultural issues of a traditional Japanese leading corporation, Dentsu acquires via London based Dentsu Aegis Network

by Gerhard Fasol

On April 20, 2015 Dentsu announced another investment in its quest to strengthen its global footprint and to strengthen capabilities in mobile and digital: Dentsu acquires Israeli digital performance agency abaGada Internet Ltd..

abaGada Internet Ltd. – performance marketing: “Building your online marketing strategy to deliver outstanding results”

abaGada Internet Ltd. was founded by current CEO, Eval Chen, in May 2010 in Tel Aviv, Israel, and employs about 22 people.

Revenues were about UKL 3.5 million in the year ended December 2014.

abaGada performs search engine marketing (SEM) to increase customers’ website traffic, analysis of customer and user behavior.

Dentsu plans to rebrand and integrate abaGada into Dentsu’s iProspect brand.

abaGada as Dentsu’s technology hub in Israel

Many large global corporations have operations in Israel to link into Israeli’s legendary innovative strengths. Israel’s technology strength and attraction for Japanese corporations was recently visualized at a series of events in Tokyo, e.g. The Israeli Venture Fund meeting in Tokyo on March 4, 2014.

With the acquisition of abaGada, Densu now also has an antenna into Israel’s innovations.

Dentsu and Dentsu-Aegis

Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

Report on Japan’s media landscape (150 pages, pdf file):

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Finance Japanese investments in EU

Nippon Life Insurance partners with AXA Life Insurance

Nippon Life Insurance (日本生命保険相互会社) acquires 1% of stock of AXA Life Insurance

Nippon Life Insurance and AXA to jointly offer health insurance product Medi-AxN

Nippon Life Insurance (日本生命保険相互会社) and AXA Life Insurance announced a partnership, and Nippon Life intends to acquire 1% of outstanding shares of AXA Life Insurance to develop a long-term partnership.

Currently AXA’s market capitalization is US$ 62 billion, therefore Nippon Life’s 1% investment in AXA corresponds to about US$ 0.62 billion.

Nippon Life Insurance and AXA are planning to jointly market the health insurance product Medi-AxN (メディ・アン).

Nippon Life Insurance (日本生命保険相互会社)

Nippon Life Insurance (日本生命保険相互会社) was founded on July 4, 1889, is based on Osaka, and has a total of 70,806 employees (of which 18,481 are in-house employees).

Nippon Life Insurance (日本生命保険相互会社) has 113 branch offices, 1562 sales offices and 12,567 distribution partners.

Nippon Life Insurance (日本生命保険相互会社, 日本生命) is a mutual company (相互会社), and not currently traded on any stock exchange.

Annual sales: YEN 7 201 billion (= US$ 60 billion) (FY 2013)
Net income: YEN 248 billion (=US$ 2 billion) (FY 2013)

AXA Life Insurance (アクサ生命保険株式会社, アクサ生命)

The AXA Group is active in 59 countries with about 157,000 employees, with about 100 million customers.

Annual sales: € 92 billion (2014)

AXA is traded on the Paris Euronext exchange.

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Japanese investments in EU M&A

Sompo Japan Nipponkoa Holdings Inc to acquire 15% of French reinsurer Scor SE

Sompo continues globalization

Sompo to acquire 15% of Scor SE for approx. US$ 915 million

On March 6, 2015, Sompo Japan Nipponkoa Holdings Inc (損保ジャパン日本興亜ホールディングス株式会社) announced the investment in the French reinsurer Scor SE, as follows:

  • 7.8% (8.1% of voting rights) from largest shareholder, Patinex AG. Patient is a Swiss holding company, owned by Martin and Rosmarie Ebner.
  • Sompo plans to increase holding to 15% and send Board Director

Acquisition of 15% share holding corresponds to approx. € 0.83 billion (= US$ 0.9 billion) based on the current market capitalization of SCOR SE.

Sompo Japan Nipponkoa Holdings Inc (損保ジャパン日本興亜ホールディングス株式会社)

Sompo Japan Nipponkoa Holdings Inc (損保ジャパン日本興亜ホールディングス株式会社) was founded in 2010 by the merger of Sompo Japan and Nipponkoa Insurance.

Sompo Japan Nipponkoa Holdings Inc is traded on the Tokyo Stock Exchange (Stock Code 8639), and current market capitalization is approx. YEN 1650 billion (= approx. US$ 14 billion)

In 2013, Sompo acquired UK reinsurer Canopius Group Ltd for UKL 594 million (US$ 972 million).

Scor SE

Scor SE (SE= Societas Europaea) was established in 1970 has a market capitalization of about € 5.55 billion (as of March 5, 2015).

SCOR is listed on Euronext Paris and on SIX Swiss Exchange.

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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.

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Japanese investments in EU M&A mobile

MixRadio: from Nokia to Microsoft to LINE

Messaging giant LINE continuous globalization

MixRadio will complement LINE’s local Japanese LINE Music service

by Gerhard Fasol

In December 2014, LINE and Microsoft announced that LINE will acquire the streaming music service MixRadio from Microsoft.

LINE already operates a Japan-only streaming music service “LINE Music”. Since music licensing is largely country or region specific, with this acquisition, LINE can develop global streaming music services building on existing licenses.

MixRadio

The service was developed as “NOKIA comes with Music” by NOKIA in 2007, a streaming music service which was built into certain NOKIA phones. Over the years, NOKIA also used the product names Nokia Music, Nokia Music Store and OVI Music Store for this streaming music service.

With the acquisition of NOKIA’s handset unit by Microsoft, the company became part of Microsoft, and Microsoft changed the name to “MixRadio”.

The company operates currently in 31 countries, and has a catalogue of about 36 million songs using the MP3 file format without Digital Rights Management (DRM) protection.

Competitors are Spotify and others.

Headquarters are in Bristol, UK, current CEO is Jyrki Rosenberg.

LINE Corporation

LINE Corporation is a Japanese/Korean messaging group, which is also the No. 1 top grossing global iOS and Android app provider.

For detailed discussion, see Japan game market report (398 pages, pdf-file):

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FDI Japanese investments in EU M&A

Mindworks – “the fastest growing digital agency in Greece” – to be acquired by Dentsu

Dentsu continues acquisition of digital and mobile agencies in Europe

To overcome cultural issues of a traditional Japanese leading corporation, Dentsu acquires via London based Dentsu Aegis Network

by Gerhard Fasol

On March 11, 2015 Dentsu announced another investment in its quest to strengthen its global footprint and to strengthen capabilities in mobile and digital: Dentsu acquires 80% of Greek leading independent digital agency Mindworks, and plans to integrate Mindworks into Dentsu’s Isobar and iProspect networks.

Dentsu has also acquired options to acquire the remaining 20% of Mindworks by 2017.

Mindworks – “the fastest growing digital agency in Greece”

Mindworks was founded in 2003, acquired by Atcom in 2009, and became an independent company again in January 2015.

As a division of Atcom, in the financial year ending December 2014, Mindworks had revenues of EURO 7.3 million. Mindworks has about 60 employees.

Mindworks – to be renamed Isobar-iProspect Advertising Services SA

Mindworks will be renamed Isobar-iProspect Advertising Services SA, and will be integrated into Dentsu’s global Isobar and iProspect brands, representing Isobar’s and iProspect’s entry into Greece’s markets.

Dentsu and Dentsu-Aegis

Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

Report on Japan’s media landscape (150 pages, pdf file):

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Japanese investments in EU M&A Science & Technology

Nikon enters medical sector with offer for acquisition of Optos plc – “The retina company”

Nikon diversifies from digital cameras to medical imaging

Retinal imaging market estimated to grow to US$ 530 million in 2019

Currently 70% of Nikon’s business are digital camera, a rapidly shrinking market due to the popularity of smartphone cameras.

Inspired by SONY‘s investment in medical imaging company Olympus, Nikon diversifies from digital cameras into medical imaging, acquiring the Scottish retinal imaging company Optos plc – “The retina company”.

Nikon is reported to have approached Optos plc in December 2014, but seems to have been rejected.

On February 27, 2015, NIKON Corporation and Optos plc jointly announced the agreement for a recommended cash offer my by NIKON for the entire issued and to be issued share capital of Optos. Details can be found on NIKON’s official website for the Optos offer, where NIKON essentially offers a total of UKL 250.48 million (US$ 387 million) for all shares of Optos.

Optos plc – The retina company

Optos plc was founded by Douglas Anderson in 1992 after his son became blind on one eye, because his retina detachment was diagnosed too late.

Optos plc had IPO on the London Stock Exchange in February 2006. Market capitalization on February 27, 2015 was UKL 250.48 million (US$ 387 million), jumping from approx. UKL 191 million (US$ 295 million) on February 26, 2015.

Optos has a market share of about 30% of the global market for retinal imaging. The global market size of devices for retinal imaging is growing and estimated to become US$ 530 million in 2019.

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internet Japanese investments in EU M&A

NTT Communications reportedly in talks to acquire German data center operator e-shelter facility services GmbH

NTT Communications to continue global expansion

e-shelter offers about 90,000 square meters of data center space in 9 locations

NTT Communications is reported by Nikkei to be in negotiations to acquire Frankfurt based e-shelter facility services GmbH for approximately YEN 100 billion (US$ 840 million).

NTT Communications acquisition is driven by the need to grow outside of Japan, and by the need to offer global services.

e-shelter facility services GmbH

e-shelter facility services GmbH was founded in 2000, and offers 90,000 square meters of data center space in 9 locations across Germany, Switzerland and Austria.

e-shelter data centers

NTT Communications

NTT Communications was created with the privatization of NTT, which is formerly was Japan’s domestic monopoly telecommunications operator (KDD was had the monopoly for overseas telecommunications from Japan).

NTT Communications started globalization with the acquisition of US internet access, hosting and service provider VERIO for a approximately US$ 5.5 billion, announced on May 8, 2000.

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FDI Japanese investments in EU M&A

Hitachi agrees with Finmeccanica S.p.A. to acquire rail business of AnsaldoBreda S.p.A. and 40% of rail signaling company Ansaldo STS S.p.A.

AnsaldoBreda rail business to help Hitachi to compete globally with Siemens, Bombardier and Alstom

by Gerhard Fasol

Finmeccanica accelerates restructuring, reduces debt and focuses on aerospace, defense and security

Hitachi Ltd (株式会社 日立製作所) and Finmeccanica S.p.A. announced on February 24, 2015, that their Boards of Directors have agreed for Hitachi to:

  • acquire the rail business of AnsaldoBreda S.p.A. (with some exceptions) for € 36 million (US$ 41 million), and
  • to acquire Finmeccanica’s 40% holding in the rail signaling and rail systems company Ansaldo STS S.p.A. for € 773 million (approx. US$ 880 million)

Hitachi is expected to be required to launch a tender offer for all remaining shares of Ansaldo STS S.p.A. and if successful, will acquire all of Ansaldo STS S.p.A..

Estimating the overall acquisition size:

Hitachi and Hitachi Rail

Hitachi is generally considered as one of Japan’s most important and most representative companies. Hitachi was founded in 1910 bei Namihei Odaira, and produced Japan’s first electrical motors. (For a detailed analysis of Hitachi and Japan’s electronics industry, read our report “Japan electronics industries: mono zukuri“.

Hitachi’s “Smart Transformation”

While Hitachi grew into a conglomerate with a large number of different business areas, during the 15 years 1997-2012, Hitachi grew with an annual compound growth rate of only 0.48%, and during the period 1997-2012 suffered average annual net losses of YEN 45 billion (US$ 0.45 billion) per year. This difficult business situation is characteristic of Japan’s electronics industry overall, as discussed in our report “Japan electronics industries: mono zukuri“. One reason for this difficult situation is the so-called “Galapagos Effect“.

Indeed, Hitachi’s “Chief Transformation Officer” (CTrO) explained recently, that it is only in 2011/2012 that Hitachi started to benchmark important business performance data (eg. operating margin, R&D expenditure, administrative expenses, cost of sales etc) internationally. Until 2011/2012 Hitachi had only compared performance data with other Japanese companies such as Toshiba.

In April 2010, Hiroaki Nakanishi was appointed President of Hitachi, and he started the “Hitachi Smart Transformation Project” with the aim to rebuild a strong Hitachi into a truly global company. (You can find an overview of Hitachi’s Smart Transformation Project in our report: “Japan electronics industries: mono zukuri“).

Hitachi has great strengths in rail engineering, and the acquisitions of AnsaldoBreda and Ansaldo STS are an implementation of Hitachi’s Smart Transformation Project.

Other recent acquisitions and investments by Hitachi in the railway engineering field include:

AnsaldoBreda S.p.A.

AnsaldoBreda S.p.A. was formed in 2001 by the merger of the companies Ansaldo Trasporti and Breda Costruzioni Ferroviarie, and employs about 2400 employees.

Gio. Ansaldo & C. was founded in 1853 in Genoa to manufacture steam engines, steam locomotives, rail rolling stock.

Ing. Ernesto Breda and C. was founded in 1886, and became Societa Italiana Ernesto Breda (SIEB) in 1899.

AnsaldoBreda in cooperation with Bombardier produces the Italian high-speed train Frecciarossa, and other trains for many mainly European and US rail operators. Recently there have been a number of delivery problems, e.g. the IC4 for Denmark, and the Dutch/Belgian high speed train Fyra, a project which was abandoned on 31 May 2013 after its operating license was suspended by the authorities.

AnsaldoBreda businesses:

  • High speed trains
  • Trams
  • Driverless metro (e.g. in Taipei, Copenhagen, Salonicci, Riyadh, Milano, Honolulu, Brescia)
  • Metro (e.g. Circumvesuviana, Madrid, Fortaleza, Meneghino, Los Angeles, Miami Dade Country, Milano)
  • Commuter trains
  • Locomotives
  • Services

Ansaldo STS S.p.A.

Ansaldo STS S.p.A. is a manufacturer of rail signaling and transportation systems, and was founded in 2006 by the merger of a number of railway engineering companies, including:

  • US Union Switch & Signal (US&S), founded by George Westinghouse in 1881 in Pittsburgh, USA.
  • Compagnie des Signaux pour Chemins de fer (CSE), founded by Fernand Cumont in 1902, which built the first lines of the Paris Metro. Later renamed Company and Business Electrical Signals (CSEE)

40% of Ansaldo STS S.p.A.‘s shares are owned by Finmeccanica S.p.A. and Finmeccanica has now agreed to sell these 40% of shares to Hitachi. The remaining 60% are traded on the Borsa Italiana, and it is reported that Hitachi will be required to launch an offer to purchase all remaining 60% of shares following the acquisition of 40% from Finmeccanica.

Finmeccanica S.p.A.

Finmeccanica S.p.A. is an Italian industrial group, founded in 1948. As of 23 December 2014, 32.45% of Finmeccanica shares are owned by the Italian Ministry of Economy and Finance.

With the sale of the railway businesses, Finmeccanica will focus on aerospace, defense and security core business.

Japan electronics industries – mono zukuri.

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Categories
Japanese investments in EU M&A R&D

Sosei Group acquires Cambridge/UK based Heptares Therapeutics Ltd for up to US$ 400 million

Sosei Group acquires candidate drugs to compensate for expected loss of patent protection for the Seebri inhaler in 2026

Heptares Therapeutics Ltd emerged from the MRC Laboratory of Molecular Biology at the University of Cambridge

Sosei Group Corporation (そーせいグループ株式会社) is a Japanese pharmaceutical group which mainly in-licenses pharmaceutica in Europe and North America, then brings these pharmaceutica to Proof-of-Principle stage in Japan, and consecutively out-licenses these pharmaceutica for further development and marketing.

In 2026, Sosei is expected to lose patent protection for its Seebri inhaler, and to compensate for this expected loss in revenues, Sosei acquired the Cambridge (UK) based Heptares Therapeutics Ltd for up to US$ 400 million (US$ 180 million in cash plus up to US$ 220 million in incentives if certain milestones are reached).

Heptares Therapeutics Ltd

Heptares Therapeutics Ltd creates novel pharmaceutica targeting G protein-coupled receptors (GPCRs) using its StaR drug design technology.

Heptares Therapeutics Ltd started based on the research by Richard Henderson and Christopher Tate a the MRC Laboratory of Molecular Biology at the University of Cambridge (UK).

Heptares Therapeutics Ltd previously was funded by a consortium including MVM International Life Science Capital Management, Clarus Lifescience II LP, Novartis Bioventures Ltd., Takeda Ventures Inc. and the Stanley Family Foundation.

Sosei Group Corporation (そーせいグループ株式会社)

Sosei Group Corporation (そーせいグループ株式会社) was founded on June 22, 1990 with the main purpose to in-license pharmaceutica in the European and North American markets, to develop these pharmaceutica to the point of Proof-of-Principle (POP) in Phase 2a, and then to out-license these pharmaca for further development and marketing in Japan.

Sosei Group Corporation (そーせいグループ株式会社) is listed on the Tokyo Stock Exchange, Mothers Section (TSE 4565).

Sosei Group companies and subsidiaries

  • Holding Company: Sosei Group Corporation (そーせいグループ株式会社) (Tokyo and London, UK)
    • Sosei Co. Ltd.(株式会社そーせい) (Tokyo): pharmaceutical development and sales, business development in Japan
    • Sosei R&D Ltd. (London, UK): licensing and business development outside Japan
    • Activus Pharma Co., Ltd.(株式会社アクティバスファーマ) (Chiba, Japan): pharmaceutical development based on nano technology (APNT = Activus Pure Nano-particle Technology)
    • Jitsubo Co., Ltd. (JITSUBO株式会社)(Tokyo): development of peptide drugs, licensing of peptide API manufacturing technology, research related to discovery of peptide drug candidates. Acquired on December 11, 2014. Jitsubo KK was established in April 2005 by Professor Kazuhiro Chiba of the United Graduate School of Agricultural Science, Tokyo University of Agriculture and Technology. Sosei Group acquired 68.7% of voting rights for YEN 421 million (US$ 3.5 million)
    • Sosei CVC Ltd. (そーせいCVC株式会社 / そーせいコーポレートベンチャーキャピタル株式会社) (Tokyo): managing Sosei RMF1 (Regenerative Medicine Fund)

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Categories
Japanese investments in EU M&A

Wuaki.tv acquired by Japan’s e-commerce giant Rakuten

Wuaki.tv: Your online video service

Rakuten’s first entry into Spain’s markets

On June 13, 2012, Rakuten acquired Spanish online streaming video-on-demand (VOD) provider Wuaki.tv.

Wuaki.tv – slogan: Your online video service

Wuaki.tv was founded 2009 in Barcelona by current CEO Jacinto Roca.

Wuaki.tv is funded by Bonsai Capital, Axon Capital, and Marc Ingla, former Vice-President of the football club “Futbol Club Barcelona”.

Wuaki.tv offers on-demand internet rental streaming video / media based on content distribution agreements with major Hollywood studies, local studies, and partnership agreements with TV and other device manufacturers. Download or storage is currently not supported.

  • “rental” is typically for unlimited viewing within a 48 hours rental period
  • “buying” typically allows unlimited viewing for a period of 3 years or longer
  • “Season Pass” available for some TV series

Wuaki.tv about Wuaki.tv: “We offer the latest Hollywood blockbusters, the most popular TV series, and the best films from independent filmmakers. All this, easily accessible from your computer, Smart TV, tablet, phone and gaming console.” (from the Wuaki.tv website)

Subscribers:

  • Spain: 600,000
  • Andorra:
  • United Kingdom: 400,000 (December 2014), started in July 2013 at an introductory price of UKL 2.99/month (to be raised to UKL 5.99)
  • France: (start on September 15, 2014 with a soft-launch for 10,000 users). Rakuten is planning to leverage PriceMinister’s 20 million members
  • Total: 1.85 million (December 2014)

Wuaki.tv is reported to enter Italy, Germany and 12 more markets in the near future.

Platforms:

  • Android
  • Chromecast
  • iPad
  • PC (with Adobe Flash Player (version 10 or higher) installed)
  • Mac (with Adobe Flash Player (version 10 or higher) installed)
  • PlayStation 3
  • PlayStation 4
  • SmartTV (eg. Samsung, LG, Panasonic etc)
  • Xbox360, XboxONE
  • EETV set top box

Platform usage (December 2014):

  • TV: 40%
  • Smartphones and tablets: 28%
  • PC/Mac web browser: 21%
  • Game consoles: 11%
  • Total: 100%

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Categories
FDI M&A

Canon offers SEK 23.6 Billion for CCTV leader Axis AB

Canon aims for leadership in the US$ 15 billion global video surveillance market

by Gerhard Fasol

Canon offers 50% premium on Axis Aktiebolag share price of Monday Feb 9, 2015

Canon is one of Japan’s most successful electronics groups, with imaging as one of Canon‘s core business areas.

On February 10, 2015, Canon launched a public offer with a total value of about SEK 23.6 billion (US$ 2.8 billion) to acquire all outstanding shares of the Swedish surveillance video company Axis Aktiebolag. The public offer will start on March 3, 2015, and is expected to end on April 1, 2015.

Canon aims for leadership in the global video surveillance market

With this acquisition (if successful), Canon is aiming to become a global leader in the video surveillance market, which is estimated to be about US$ 15 billion globally.

Axis Aktiebolag

Axis is traded on the Nasdaq Stockholm (Large Cap) stock exchange. The trading symbol is AXIS, and the ISIN Code is SE0000672354.

Axis to remain independent entity with current management

Under the applicable Takeover Rules, Axis Board of Directors needs to express an opinion on the impact of the potential takeover on employment, on Canon’s strategic plans, and the impact of these strategic plans on employment and the communities in which Axis does business.

Axis Board of Directors declared Canon’s intention to keep Axis AB as an independent entity under the current management, and continuing the current company culture, and to retain the Axis brand name.

Axis Board of Directors’ statement of February 10, 2015 can be found here on the Axis website.

Japan electronics industries – mono zukuri.

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Categories
FDI Japanese investments in EU M&A

itelligence AG acquired by NTT Data

NTT DATA Business Solutions

Largest global SAP reseller and one of the largest SAP solution providers

On 23 October 2007, NTT DATA, NTT DATA Europe and itelligence AG announced a partnership, and NTT DATA announced to intention of an offer to acquire the shares at € 6.20 per share, about 37.2% higher than the closing price as of 22 October 2007.

On 13 November 2007, NTT DATA Europe published an offer to acquire outstanding shares. This offer ended at midnight on 2 January 2008, and NTT DATA Europe acquired 20,974,169 (= 87%) of outstanding shares, corresponding to an acquisition value of € 130 million, and a total company valuation of € 149.5 million.

On 29 January 2008, NTT DATA sold 2,459,523 shares to NTT Communications Corporation for € 15 million corresponding to € 6.10 per share, leaving NTT DATA with 18,514,646 shares.

On 20 December 2012, NTT DATA Europe announced that it had acquired an additional 3,831,574 shares (= 12.77%) in another tender offer, and an additional 1,317,605 shares (= 4.39%) outside this offer. As a result, NTT DATA holds a total of 29,544,428 shares (= 98.43%). Following this tender offer, NTT DATA proposed a “squeeze out” (aktienrechtlicher Squeeze-out) under the German Stock Corporation Act to acquire the remaining outstanding shares.

On 23 May 2013, the Annual General Meeting of itelligence AG approved the squeeze-out of remaining minority shareholders at a cash compensation of € 10.80 per share.

itelligence AG was delisted from the Stock Exchange in June 2013.

Thus itelligence AG on 23 May 2013 became a 100% owned subsidiary of NTT DATA Europe GmbH & Co KG, but will continue to operate as an independent group within the NTT DATA Group.

NTT DATA Business Solutions

In 2012 itelligence AG added to co-branding NTT DATA Business Solutions

itelligence AG “We make the most of SAP solutions!”

itelligence AG is a SAP solution provider.

Company history:

  • 1989 Herbert Vogel and Wolfgang Schmidt founded S&P as a management consulting firm focused on introducing SAP. S&P was one of SAP’s first partner companies.
  • 1994 S&P was converted into “SVP GmbH” (Schmidt Vogel & Partner)
  • 1999 SVP GmbH was converted into SVC AG (Schmidt Vogel Consulting) and listed in an IPO
  • On 7 May 2001, the shareholders of SVC AG Schmidt Vogel Consulting agreed in the merger with APCON AG, forming itelligence AG
  • On 23 October 2007, itelligence AG entered into a partnership with NTT DATA
  • On 23 May 2013 itelligence AG became a 100% owned subsidiary of NTT DATA and the shares of itelligence AG were delisted

itelligence AG acquisitions

itelligence AG (and therefore NTT DATA via itelligence) has acquired a number of companies in the SAP solutions field:

  • 2008: acquires shareholding in SAPCON a.s.
  • 2009: ADELANTE SAS: On 19 March 2010 intelligence acquired 51% of ADELANTE SAS.
  • 2009: Chelford SAP Solutions: on 6 August 2010, itelligence AG acquired 100% of Chelford SAP Solutions
  • 2009: acquires RPF Consulting LLC
  • 2009: acquires participation in 2B Interactive
  • 2010: 2C Change A/S: on 14 June 2011, itelligence AG acquired 60% of 2C change A/S and an option to acquire the remaining 40%
  • 2011: acquired 100% of CONTEMPORARY plc
  • 2011: acquired Blueprint Management Systems
  • 2012: acquired 60% of interest in Elsys
  • 2013: on 1 Nov 2013 acquired 100% of Aster Group
  • 2013: itelligence AG acquired the SAP consulting, licensing and maintenance businesses from Software AG
  • 2014: on 1 October 2014 acquired Symphony Management Consulting

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Categories
Japanese investments in EU M&A

Integralis acquired by NTT Communications creating NTT Com Security AG

NTT Communications acquired 78.4% of Integralis AG which is renamed NTT Com Security AG

by Gerhard Fasol

Managed Security Services (MSS): Greschitz IT Security and Secode AB join NTT Com Security AG

On June 30, 2009, NTT Communications announced a public tender offer for the shares of Integralis AG offering € 6.75 in cash per share. Integralis at that point was traded on the Frankfurt Stock Exchange (Xetra).

In October NTT Communications acquired 78.4% of Integralis AG at a cost of € 59.1 million, to offer managed security services.

Integralis AG

The company was founded on 19 July 1993 as “Articon Fertigungsleitsysteme GmbH”, Articon Information Systems AG had IPO on the German Neuer Markt in 1998.

Integralis Ltd was founded in 1989.

On 29 February 2000, Articon Fertigungsleitsysteme GmbH and Integralis Ltd merged, and the resulting company was Articon-Integralis AG.

Integralis renamed NTT Com Security AG

On 24 June 2013, Integralis AG was renamed NTT Com Security AG.

NTT Com Security AG

NTT Com Security AG is a listed company, and the company’s shares are traded in the m:access segment of the open market of the Munich Stock Exchange. There are 13,036,844 outstanding shares.

Share holding (according to NTT Com Security AG website):

  • 78.30% NTT Communications Corporation
  • 2.31% treasury stock
  • 19.39% free float

NTT Com Security AG / Integralis acquires Austrian Greschitz IT Security

Thomas Greschitz founded Greschitz IT Security 1995 to focus on internet security, in particular Check Point firewall systems in Graz. 2000 the company moved from Graz to Vienna.

2007 Thomas Greschitz founded the company Greschitz Management GmbH.

2008 Thomas Greschitz sells Greschitz IT Security to Integralis AG.

2010 Thomas Greschitz leaves Greschitz IT Security to focus fully on Greschitz Management GmbH.

NTT Com Security AG acquires Swedish Secode AB

On August 11, 2010, NTT Communications Corporation announced the acquisition of all shares of Secode AB, a managed security services (MSS) provider operating in the Nordic countries. Secode AB’s security operation centers (SOCs) were folded into NTT Communications network of SOCs.

On December 1, 2011, NTT Communications transferred the shareholding in Secode AB to Integralis AG (today’s NTT Com Security AG), making Secode AB a fully owned subsidiary or Integralis AG (Today NTT Com Security AG).

Secode AB become part of NTT Com Security AG.

About NTT and Japan’s telecom markets

Copyright 2014 Eurotechnology Japan KK All Rights Reserved

Categories
Japanese investments in EU M&A mobile payment

net mobile AG majority stake acquired by NTT Docomo

globalizing Docomo’s mobile payment and content services

bringing German mobile know-how to Japan

On September 11, 2009, NTT Docomo announced a voluntary public tender offer for shares of net mobile AG. The tender offer was closed on November 27, 2009, and Docomo Deutschland GmbH acquired 6,126,567 shares at € 6.35 per share corresponding to 79.59% of the company, at a total acquisition cost of € 38.9 million, thus valuing net mobile AG at € 48.9 million.

Acquisition of Bankverein Werther AG to create Net-m Privatbank 1891 AG

On September 22, 2011, NTT Docomo announced the additional investment of up to € 28.4 million (YEN 3.1 billion) in net mobile AG, for the purpose of net mobile AG acquiring Bankverein Werther AG.

The company goes back to the foundation of the financial cooperative “Vorschussverein zu Werther”, which was founded in 1877 in Werther, near Bielefeld in Germany. In 1891, the Vorschussverein zu Werther was transformed into the bank “Bankverein Werther Aktiengesellschaft”. During 2011, Net Mobile AG acquired 93% of shares of Bankverein Werther AG. On December 1, 2011, the traditional banking business, including the trademark “Bankverein Werther” was sold to the regional bank “Volksbank Paderborn-Höxter-Detmold eG“.

With the sale of the traditional banking business and the tradename and brand, the bank reentered the market as Net-m Privatbank 1891 AG. At the end of 2012, Net Mobile AG acquired all remaining shares, so that Net-m Privatbank 1891 AG became a 100% owned subsidiary of net mobile AG.

net mobile AG

net mobile AG was founded on 9 October 2000 in Köln, and headquarters later the same year moved to Düsseldorf (Handelsregister/trade registry No. HRB 48022). In 2001, Net Mobile AG acquired SMS Infowelt. net mobile AG’s business at that time was marking info-SMS, ringing tunes, and other information services for mobile phones.

net mobile AG is a public company, traded at the Frankfurt and München Stock Exchanges (Freiverkehr).

Currently the market cap of net mobile AG is € 77 million (US$ 94 million).

Share ownership (according to the net-mobile website):

  • 87,13 % DOCOMO Deutschland GmbH, a 100& subsidiary of NTT Docomo Inc.
  • 12,87% traded on the Frankfurt and München stock exchanges

net mobile AG subsidiaries

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Categories
Energy EU investments in Japan M&A Renewable energy

Idemitsu Kosan may acquire Showa Shell Sekiyu KK for YEN 500 billion (US$ 4.1 billion)

SHELL may exit Japan after 138 years here

Idemitsu Kosan (出光興産株式会社) aims for market leadership

On December 20, 2014, both Idemitsu Kosan and Showa Shell separately announced that they had entered into discussions of possible business reorganization, indicating that Idemitsu Kosan may acquire Showa Shell next year. Because Showa Shell Sekiyu KK is a Japanese company traded on the Tokyo Stock Exchange, such an acquisition would be via a tender offer for outstanding shares.

With the development of fuel efficient cars and the shrinking population, refined oil products are a shrinking market in Japan, and a merger between Idemitsu Kosan and Showa Shell is a consequence of consolidation of this shrinking market.

This merger would also mean a departure of Royal Dutch Shell from the Japanese market.

Showa Shell Sekiyu KK (昭和シェル石油株式会社)

Listed on Tokyo Stock Exchange (TKS5002)
Market cap: YEN 384 billion (= US$ 3.2 billion)

Although Showa Shell Sekiyu KK (昭和シェル石油株式会社) generally uses the famous yellow and red Shell logo, Showa Shell Sekiyu KK (昭和シェル石油株式会社) is not a wholly owned subsidiary of Royal Dutch Shell plc, but its a public company traded on the Tokyo Stock Exchange (TSE5002), with a large number of shareholders beyond Royal Dutch Shell plc, which is the largest shareholder with a holding of 35.0%.

Given Royal Dutch Shell plc’s holding of 35.0%, this holding currently is worth approx. YEN 134.4 billion (US$ 1.12 billion).

35% of the reported tender offer price would correspond to YEN 175 billion (US$ 1.44 billion)

Shareholders:

  • 35.0% Royal Dutch Shell Plc
  • 14.9% Government of Saudi Arabia
  • 1.8% Nomura Asset Management Co., Ltd.
  • 0.9% Daiwa Asset Management Co. Ltd.
  • 0.9% Nikko Asset Management Co., Ltd.
  • 0.7% Grantham, Mayo, Van Otterloo & Co. LLC
  • 0.7% SEB Investment Management AB
  • 0.6% BlackRock Fund Advisors
  • 0.6% The Vanguard Group, Inc.
  • 0.6% Norges Bank Investment Management
  • 42.7% others
  • —————————————
  • 100.0% Total

related: Solar Frontier KK

Solar Frontier KK is a 100% owned subsidiary of Showa Shell Sekiyu KK, developing and manufacturing copper indium gallium selenide (CIGS) solar cells and related business, such as developing and operating solar power stations using CIGS cells.

Revenues and market shares in Japan’s oil/gasoline markets

With a merger of Idemitsu and Showa-Shell, the combined company will have a firm second position with a 30% market share, very close to the market leader JX Holdings with 34% market share.

History of Shell and Showa Shell Sekiyu KK (昭和シェル石油株式会社) in Japan

Showa Shell Sekiyu KK (昭和シェル石油株式会社) is the basis of the Royal Dutch Shell Group in Japan.

Showa Shell Sekiyu KK (昭和シェル石油株式会社) was formed on January 1, 1985 by the merger of Showa Oil Co Ltd and Shell Sekiyu KK. The Royal Dutch Shell Group had a shareholding in Showa Oil Co Ltd since June 1951.

Shell Sekiyu KK goes back to Samuel Samuel & Co, started by Samuel Samuel in partnership with his brother Marcus Samuel, 1st Viscount Bearstead (subsequently The Lord Bearstead and The Rt. Hon. The Viscount Bearsted Bt. – the founder of the Shell Transport and Trading Company), in Yokohama around 1876. Samuel Samuel & Co set up the Rising Sun Petroleum Co Ltd. In 1947, Rising Sun Petroleum Company was renamed Shell Sekiyu.

Shell Sekiyu and Showa Sekiyu merged in 1985 to form Showa Shell Sekiyu.

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Categories
Japanese investments in EU M&A

Toray acquires Saati SpA’s European carbon fiber fabric and prepreg business

Toray acquires Saati’s European fabric business: Toray builds integrated supply chain in Europe

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

Toray acquires Saati’s European fabric business: Toray announced on 10 December 2014 the agreement to acquire the European carbon fiber fabric and prepreg business of Saati SpA. Toray will take over Saati’s plant located in Legnano (Milano Province) in January 2015, renaming the operations “Composite Materials (Italy) Srl (CIT)” and to become a fully owned subsidiary of Toray.

Saati will continue to own and operate the Saati composite business in America.

Saati SpA

SAATI SpA was founded in 1935 to manufacture silk flour mesh fabrics, and employs about 850 people.

Saadi SpA operates five divisions:

  • printing: graphics, electronics, apparel, glass etc
  • chemicals: screen printing, emulsions, screen prep and reclaim materials
  • filtration
  • protection: ballistic panels, helmets etc
  • composites: carbon fabrics, glass fabrics, prepreg, UD, etc

Pre-preg

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

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Categories
EU investments in Japan FDI M&A

EU investment in Japan could be 50% higher had Vodafone succeeded in Japan

EU investment in Japan is about € 85 billion – it could be 50% higher!

by Gerhard Fasol

Vodafone-Japan: what could the value be today?

Had Vodafone succeeded in Japan, Vodafone-Japan could be worth about US$ 50 billion today, about 1/2 of Vodafone’s total global market-cap today, and combined investment in Japan by European (EU) companies could be about 50% higher than it is today!

With COLT about to acquire KVH, it might seem that this is the only foreign infrastructure based telecom provider left in Japan’s telecom market after a long string of management failures, including Vodafone, Cable & Wireless, Willcom, WorldCom and others.

However, foreign investment in Japan’s telco/cloud infrastructure has not ended, and we believe the next wave including AWS, Microsoft, Google et al may become far more successful than the first wave.

For companies considering investment or business expansion in Japan, it is useful to understand the potential market-capitalization which can be achieved in Japan in case of success, instead of just looking at the sales figures:

  • as an example, combined EU investment in Japan is estimated to be approx. € 85 billion (US$ 106 billion) in total,
  • had Vodafone succeeded in Japan, total investment in Japan by European (EU) companies would be about 50% higher than it is today.

Why Vodafone-Japan could be worth US$ 50 billion (1/2 of Vodafone’s global market cap) had it been successful

Let us estimate what Vodafone-Japan could be worth today, had it not failed:

Since Vodafone-Japan’s sale to SoftBank on March 17, 2006, Japan’s telecom market has continuously grown, so we can expect today’s valuations to be considerably higher than in 2006. Lets assume that Vodafone-Japan had been successful, and had grown in sync with competitors NTT-Docomo and KDDI, and lets assume that Vodafone-Japan would have been able to continue J-Phone’s innovations to keep subscription figures and financial results in sync with KDDI. In this case, it would not be unreasonable to assume that Vodafone-Japan’s market capitalization today would be KDDI’s minus the value of KDDI’s global data-center business. Thus we arrive at an estimate, that Vodafone-Japan would have a market-cap value on the order of US$ 50 billion today.

US$ 50 billion is about 50% of Vodafone’s total global valuation, and about 50% of the sum of all direct investments in Japan by all European (EU) companies combined.

Thus, had Vodafone been successful in Japan, EU investments in Japan could be about 50% higher than they are today, and Vodafone’s global market cap could be 50% higher as well.

Market capitalization (Dec 2, 2014):

  • NTT Group: US$ 61 billion
  • NTT-Docomo: US$ 68 billion
  • KDDI: US$ 58 billion
  • SoftBank: US$ 80 billion
  • Vodafone plc (global group): US$ 97 billion
  • Vodafone-Japan market cap, had it been successful (our estimate): US$ 50 billion corresponding to approx. 50% of Vodafone’s global market cap)
  • total investment in Japan by all European (EU) companies combined: € 85 billion (= US$ 106 billion)
    (see: EU-Japan direct investment register)
EU investment in Japan is about € 85 billion - it could be 50% higher!
EU investment in Japan is about € 85 billion – it could be 50% higher!

Japan telecommunications industry market report

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EU investments in Japan IT M&A

Colt to acquire KVH – the Tokyo based cloud and data center service provider

Colt to acquire KVH for YEN 18.595 billion (€ 130.3 million = US$ 160 million)

by Gerhard Fasol

The acquisition

Both Colt and KVH were founded with investments by Fidelity Investments and associated companies, Colt in London in 1992, and KVH in 1999 in Tokyo, as telecommunications service providers for the financial industry and other industrial customers. While KVH remained 100% owned by Fidelity and associated companies, Colt was listed on the London Stock Exchange in 1996.

Initially founded as telecommunications companies, both Colt and KVH have developed into “information delivery platforms” based on networking infrastructure, data centers, optical fibre networks and associated management and information services.

On November 12, 2014, Colt announced the plan to acquire KVH for YEN 18.595 billion (€ 130.3 million = US$ 160 million) in cash from KVH’s owner Fidelity Investments.

Since KVH is 100% owned by Fidelity Investments, and Colt have also been founded by Fidelity which is still a shareholder, the acquisition needs to be approved by independent Directors and by independent shareholders of Colt.

A General Meeting of Colt’s shareholder has been announced for December 16, 2014 at 10:00am in Luxembourg where the approval of shareholders of Colt will be sought.

Colt – the “information delivery platform”

Colt was founded by James P Hynes (Jim Hynes) with investments from Fidelity Investments and related companies in 1992 in London, and went public with an IPO on London Stock Exchange in 1996.

Colt operates 20 data centers and substantial optical fiber networks, and has more than 5000 employees.

Colt’s annual revenues are € 1,575.8 million (= US$ 2 billion) in 2013.

Colt market capitalization currently is UKL 1.19 billion (= US$ 1.9 billion).

KVH – “Asia’s information delivery platform”

KVH was founded by Fidelity Investments and related companies on April 2, 1999 in Tokyo.

KVH operates 9 Data Centers, owns optical fiber networks in Japan and to major financial centers in the world, and has about 590 employees.

KVH annual revenues are approx. € 133.6 million (= US$ 170 million) in FY2013, i.e. Colt is about 10 times bigger in terms of market cap and sales than KVH.

KVH owns optical fibre, ethernet, data center data infrastructure in Tokyo, Osaka and other parts of Asia.
KVH owns optical fibre, ethernet, data center data infrastructure in Tokyo, Osaka and other parts of Asia. This photograph shows KVH owned cable infrastructure in the center of Tokyo

The planned acquisition values KVH at YEN 18.595 billion (€ 130.3 million = US$ 160 million), i.e. COLT is about 12 times bigger than KVH in terms of market capitalization/value.

Implications of acquisition of KVH by Colt – view as a Japan (and Asia) market entry by Colt

From the point of view of Colt, the acquisition of KVH – which has always been a sister company via the common investor Fidelity Investments, and common founder Jim Hynes – is a relatively low risk market entry into Japan and several other major Asian markets, and promises to have a very high chance of success for all parties.

We need to keep in mind, that essentially all other large scale market entries into Japan by infrastructure based telecommunication operators have failed: Vodafone, Cable & Wireless, WorldCom’s market entries into Japan’s telecom markets have all failed, and to our knowledge KVH is the only remaining internationally owned telecom infrastructure company in Japan today.

You can read a detailed discussion about why Vodafone failed in Japan in our blog here “Vodafone Japan could have been a business worth US$ 50 billion today. Why did Vodafone Japan fail and sell to SoftBank?”.

Essentially, both Vodafone and Cable & Wireless failed in Japan’s telecom markets, because they did not have the multitude of skills and know-how needed to manage a telecommunications business in Japan in a competitive manner. Colt with the acquisition of KVH acquires this know-how, and KVH at the same time has been an internationally managed company from the outset, so that Colt avoids the risks of acquiring a 100% Japanese companies such as Vodafone had done by acquiring Japan Telecom, with all the cultural issues that this entails.

At the same time, we also need to keep the scale in mind. While KVH has a market capitalization (i.e. the purchase price) of US$ 160 million, it can be argued that Vodafone-Japan could be expected to have a capitalization of around US$ 60 billion today had it been successful – i.e. about 375 times larger than KVH.

Japan’s largest telecommunication operator NTT currently has a market capitalization of US$ 62 billion, i.e. about 390 times larger than KVH, while SoftBank’s market capitalization is about 500 times larger than KVH’s.

Thus, if we see Colt’s acquisition of KVH as a market entry into Japan by a European telecom operator, then this is on an approx. 300-400 times smaller scale than Vodafone’s failed market entry into Japan, and with far better circumstances, and a far higher chance of success, and in our view with very carefully controlled risks.

Without doubt, a merger of KVH with Colt was on the minds of Fidelity Investments and Jim Hynes, when they founded both KVH and Colt in the 1990s.

Japan telecommunications industry market report

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Japanese investments in EU M&A Renewable energy

Hitachi Zosen Inova AG acquires Energy-from-Waste (EfW) EPC Axpo Kompogas Engineering AG (Komeng)

Waste is our Energy! – Energy-from-Waste (EfW)

by Gerhard Fasol

Hitachi Zosen Inova AG acquires Axpo Kompogas Engineering AG

AXPO agreed on October 24, 2014 to sell its subsidiary Axpo Kompogas Engineering AG to Hitachi Zosen Inova AG (ZHI AG). Closing is in mid December 2014.

Axpo Kompogas Engineering AG (Komeng)

Axpo Kompogas Engineering AG (Komeng) is an EPC (engineering, planning, construction) company planning and constructing dry fermentation plants using the Kompogas process, which produces biogas and compost from biomass via a dry fermentation process.

Address: Flughofstrasse 54, CH-8152 Glattbrugg, Switzerland
CEO: Bernard C. Fenner
Business: EPC (engineering, procurement, construction) and maintenance of Kompogas plants
Established: 2013
Capital: approximately SFR 3.6 million (YEN 425 million)

Kompogas method generates biogas by methane fermentation from kitchen and other organic waste

The Kompogas process was developed about 1988-1989 by the Swiss entrepreneur Walter Schmid initially on his private balcony.

The Kompogas process produces biogas and compost from biological, organic waste via a fermentation process. The resulting biogas can be used for cars and trucks, and the compost as organic fertilizer.

AXPO is an electricity operator, generating, distributing, selling and trading electricity, and is fully owned by cantons of north-eastern Switzerland.

Hitachi Zosen Inova AG (ZHI AG), which became a subsidiary of Japan’s Hitachi Zosen Corporation (日立造船株式会社) with the acquisition of the bankrupt AE&E Inova Holding AG on December 20, 2010, acquires Axpo Kompogas Engineering AG, as of Nov. 5, 2014.

Hitachi Zosen Inova AG (HZI AG) history

Hitachi Zosen Inova AG (HZI AG) was created when Hitachi Zosen acquired AE&E Inova Holding AG on December 20, 2010, after it filed for bankruptcy in Zurich on December 3, 2010, read details here.

AE&E Inova Holding AG goes back to a department for thermal waste management of the Gesellschaft der Ludwig von Roll’schen Eisenwerke which was founded in 1823.

Japan electronics industries – mono zukuri.

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Japanese investments in EU M&A Renewable energy

JFE Engineering acquires boiler maker Standardkessel Power Systems Holding GmbH

JFE Engineering globalizes and strengthens biomass and waste electricity generation systems business

Standardkessel-Baumgarte: from a classic boiler maker to biomass and waste-to-energy power plants

JFE Engineering acquires all outstanding shares of Standardkessel Power Systems Holding GmbH, for approximately YEN 10 billion (US$ 87 million), from current shareholders.

Standardkessel (founded 1925) and Baumgarte (founded 1935) started as classic boilermakers, and today supply turnkey power plants and power plant components for fossil energy sources, e.g coal, gas and oil, and also for alternative energy carriers, e.g. biomass, municipal waste, and industrial waste.

Standardkessel Power Systems Holding GmbH is a holding company owning 100% of the shares in the Standardkessel Baumgarte Group, which consists of:

  • Standardkessel GmbH (founded 1925)
  • Baumgarte GmbH (founded 1935)
  • Standardkessel Baumgarte Service Holding GmbH (founded 2008)

Standardkessel-Baumgarte were founded as classic boiler makers, and developed into makers of biomass and waste-to-energy power plant suppliers and service group.

By acquiring Standardkessel-Baumgarte, JFE Engineering can strengthen overseas business, accelerate globalization and move into the biomass and waste-to-energy electricity and power generation sector.

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Japanese investments in EU M&A

Heraeus Kulzer acquires EGS Srl (Enhanced Geometry Solutions)

Japanese companies’ strategy to overcome cultural post-merger problems: European subsidiaries acquire

Heraeus Kulzer acquires EGS, expanding both Mitsui Chemicals’ foot print in Europe and global market penetration for Mitsui Chemicals’ dental supplies business

Japanese companies are well known to have substantial difficulties with post merger integration as a consequence of massive cultural differences which need to be overcome for successful acquisitions. One way to mitigate these difficulties is for Japanese companies to acquire a substantial European company, make this acquisition a success, and then acquire additional companies via this first successfully integrated subsidiary. One example for this path is Dentsu with its Aegis acquisition, see: Dentsu acquires Aegis. Subsequently, Aegis acquires a string of companies all over Europe for Dentsu.

Mitsui Chemicals follows a similar strategy by first acquiring Heraeus Kulzer, which then again acquires the CAD/CAM specialist Enhanced Geometry Solutions, EGS Srl.

Enhanced Geometry Solutions, EGS Srl, makes 3D scanners, CAD software, and digital tools for scanning, modeling, designing workflow in dental laboratories.

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Japanese investments in EU M&A

Panasonic self-driving car technology: Ficosa investment

Panasonic restructures away from TVs and other commodities to automotive parts

by Gerhard Fasol

Panasonic self-driving car technology

As part of the restructuring efforts, Panasonic invests in Spanish car parts maker Ficosa in order to jointly develop Panasonic self-driving car technology.

We have documented in our blogs and reports on Japan’s electronics industry how Japan’s electronics giants lost their global dominating advantages as TVs and other electronics products became commodities, and Japanese electronics makers were blind sided by Apple, Samsung and many other faster innovators. Japanese electronics companies including Panasonic were slow to recognize that their market leading positions were rapidly melting away, and were slow to change.

As part of the restructuring efforts, Panasonic sold several semiconductor fabs to Tower-Jazz, and in a move into car parts, Panasonic invests about US$ 275 million to acquire an approximately 50% stake in the Barcelona based Spanish car parts maker Ficosa International, in order to jointly develop self-driving car technology.

Ficosa had acquired the Sony Barcelona Technology Center

Interestingly, Ficosa had previously in 2010 acquired “SONY Barcelona Tec” SONY Barcelona Technology Center located at Viladecavalls near Barcelona partly alone, and partly in a joint-venture with the infrastructure company Comsa Emte SL.

Japan electronics industries – mono zukuri.

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EU investments in Japan mobile

Nokia to buy Panasonic’s mobile phone base station division

Nokia to acquire Panasonic System Networks

by Gerhard Fasol

Nokia to expand market share in Japan, Panasonic to focus on core business

Panasonic, after years of weak financial performance, is focusing on core business. Nikkei reports that Panasonic is planning to sell the base station division, Panasonic System Networks, to Nokia.

Nokia expands No. 1 position in Japan

Our analysis of Japan’s mobile phone base station market shows, that Nokia became No. 1 in Japan’s base station market with the acquisition of Motorola’s base station division. Acquisition of Panasonic System Networks will expand Nokia’s NSN to expand market leadership in Japan’s mobile phone base station market.

Panasonic System Networks

Panasonic System Network’s market share is estimated at around 10% of Japan’s mobile phone base station market, while international sales are essentially non-existent. Thus Panasonic System Network’s global market share is negligible, giving Panasonic little possibility for the scale necessary to operate a stable profitable longterm base station business.

Japan’s mobile phone handset makers and base station makers have for many years focused on serving Japan’s internal market only, and in particular have focused on Japan’s No. 1 mobile phone operators NTT Docomo. This gave Japan’s mobile phone base station makers a temporary home advantage, however with the value shift from hardware to software, they lack scale, and are subsequently uncompetitive globally. More about Japan’s Galapagos effect here.

The context: EU investments in Japan

While Japanese investments in Europe are booming, recently European investments in Japan have been stagnating after Vodafone’s withdrawal from Japan, and there are very few new European investments in Japan. Could it be that Nokia’s investment in Japan starts a new trend of renewed European investments in Japan?

Japan telecommunications industry market report

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FDI Japanese investments in EU Renewable energy

Yaskawa acquires The Switch Engineering Oy, manufacturer of generators for wind power

The Switch Engineering Oy was valued US$ 265 million in 2011

Trend: Japanese companies acquire European renewable energy technology companies

On July 2, 2014 Yaskawa Electric Corporation acquired all shares of The Switch Engineering Oy, which are not owned by the Switch. The acquisition price was not announced, however, AMSC in 2011 had agreed and later cancelled to acquire The Switch for US$ 265 million. Therefore we can expect the acquisition price to be at least of this order if not much higher.

Vacon plc held approx. 14% of The Switch directly and another approx. 5% through the investment fund Power Fund I. On July 1, 2014, Vacon plc sold all these shares to Yaskawa Electric Corporation.

Finnish Industry Investment sold a holding of The Switch to Yaskawa.

The Switch Engineering Oy “Bringing you power”

The Switch Engineering Oy makes permanent magnet generators (PMG) and full-power converters (FPC) for wind turbines (1 MW – 8 MW and higher), marine applications and other industrial applications.

The Switch was founded in 1996, and in 2013 reported sales of € 46.2 million (US$ 53 million), and employed 175 people. The Switch headquarters are in Vantaa, Finland.

The Switch Engineering Oy was valued US$ 265 million in 2011

On March 14, 2011, American Superconductor Corporation AMSC signed a definitive agreement to acquire The Switch for US$ 265 million. However, on October 31, 2011, AMSC announced the cancellation of this agreed acquisition and paid € 14.2 million as break-up fee, a sum which had already been paid as an advanced payment of the acquisition price.

Yaskawa Electric Corporation (株式会社 安川電機)

Yaskawa Electric Corporation was founded on July 16, 1915, and headquarters are in Kitakyushu in the West of Japan.

Sales by business segment (FY2014: Fiscal year ended March 2015)

  • Motion control: YEN 188.1 billion (US$ 1.571) 47%
  • Robotics: YEN 136.0 billion (US$ 1.136 billion) 34%
  • System Engineering: YEN 41.0 billion (US$ 0.342 billion) 10%
  • Other: YEN 35.1 billion (US$ 0.293 billion) 9%
  • Total: YEN 400.153 billion (US$ 3.3 billion) 100%

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Energy Japanese investments in EU

Toshiba acquires 60% of NuGeneration Ltd

Toshiba acquiring an additional 10% of NuGeneration

by Gerhard Fasol

NuGeneration becomes a joint-venture between Toshiba (60%) and GDF Suez (40%)

In December 2013, Toshiba purchased 50% of NuGeneration Ltd from Iberdrola (of Spain) for UKL 85 million (US$ 146 million).

On June 30, 2014, Toshiba announced to purchase an additional 10% of NuGeneration Ltd from GDF Suez.

Thus, NuGeneration becomes a joint-venture between Toshiba (owning 60% of NuGeneration) and GDF Suez (owning 40% of NuGeneration).

NuGeneration Ltd (NuGen)

NuGeneration Ltd. (NuGen) owns an option to purchase the 190 hectare Moorside site, located to the north of Sellafield, from the UK Nuclear Decommissioning Agency.

NuGeneration plans to build a 3.4 GigaWatt nuclear power station using three AP1000 reactors built by Westinghouse. Westinghouse is owned by Toshiba (87%), by Kazakhstan based Uranium and nuclear fuel producer KazAtomProm (10%) and the Japanese engineering company IHI (3%).

When finished, NuGeneration’s Moorside nuclear power plant is expected to deliver about 7% of UK’s electricity.

Two factors drive Toshiba to acquire a majority holding of NuGeneration (NuGen):

  1. the great uncertainty of the future of nuclear power in Japan following the Fukushima nuclear accident
  2. Toshiba’s commitment to nuclear power – and dependence on nuclear power construction following the acquisition of the majority of Westinghouse

Japan electronics industries – mono zukuri.

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Uncategorized

CSC Media Group (of UK) acquired by SONY for 107 million pounds

CSC Media Group of UK (formerly Chart Show Channels) owns 19 cable and satellite channels acquired by SONY

CSC Media Group acquisition for UKL 107 million

On June 26, 2014 SONY announced the acquisition of the CSC Media Group of UK for a total of 107 million pounds from the major shareholder Veronis Suhler Stevenson.

CSC Media Group owns and operates 16 satellite and cable channels in the UK.

With this acquisition SONY owns 25 TV channels in Great Britain, and about 64 channels globally.

We believe that with this acquisition SONY aims to strengthen the profitability of content distribution to accompany the restructuring of SONY’s loss making electronics division, which includes the production of TV sets.

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M&A

Nippon Steel & Sumikin Engineering Co., Ltd. acquires Fisia Babcock Environment GmbH

Nippon Steel & Sumikin Engineering Co Ltd (Nippon Steel & Sumitomo Metal Corporation, Tokyo Stock Exchange Code 5401) on May 7, 2004 acquired 100% of the shares of Fisia Babcock Environment GmbH (located in Gummersbach, Germany) from Impregilo International Infrastructure N. V. (which is wholly owned by Salini Impregilo S.p.A., Milano, Italy), for EURO 139.3 million.

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Japanese investments in EU M&A

Video surveillance specialist Milestone Systems A/S acquired by Canon

Canon acquires video surveillance specialist Milestone Systems A/S in June 2014

Milestone Systems A/S is a leading IP based video management software (VMS) and network video recorder (NVR) provider for video surveillance

Milestone System was founded in 1998 to apply IP technology from the financial sector to the surveillance video sector, which had previously been predominantly analogue.

10 July 2008, Index Ventures announced an investment of $27 million (17 million Euros) into Milestone Systems.

IHD estimates that the video surveillance market size is on the order of US$ 13 billion, while Milestone Systems A/S is estimated to have an 8% market share.

Milestone Systems A/S

Milestone Systems A/S

Founded in 1998 by Henrik Friborg and John Blem by applying their knowledge of IP technology for real-time financial systems to digital video surveillance, replacing previously mainly analogue recording techniques.

In June 2014 Milestone Systems A/S was acquired by Canon, reports to Canon Europe, but works as a stand-alone company.

Revenues: DKK 709 million (= US$ 110 million) (2016)
Operating incomee: DKK 121 million (= US$ 19 million) (2016)
Net income: DKK 42 million (= US$ 6.5 million) (2016)
Employees: 600 (2015)

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FDI Japanese investments in EU M&A

DC Storm acquired by Rakuten Marketing to strengthen marketing analytics and attribution

Rakuten acquires marketing attribution specialist

Following acquisition of Adometry by Google and of Convertro by AOL

On May 28, 2014, Rakuten Marketing announced the acquisition of the Brighton (UK) based marketing attribution specialist DC Storm.

Although terms of the acquisition were not disclosed, Google on May 6, 2014 acquired Adometry for about US$ 150 million, and AOL on the same day acquired Convertro for US$ 101 million. Therefore we assume that Rakuten Marketing probably also paid on the order of US$ 100 million for DC Storm.

Marketing attribution: measuring return (ROI) on marketing investment

Marketing attribution has its origin in the work of Austrian psychologist Fritz Heider‘s work on Attribution Theory, and his seminal work “The Psychology of Interpersonal Relations” of 1958.

Attribution is the process by which people explain the causes for actions, and models for these processes (source: Wikipedia).

Marketing attribution develops understanding of which combination of events leads individuals to take particular actions, e.g. to conclude a purchase for example (source: