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Tue, Oct

japan latest news, important news, trending news Merger and acquisition (M&A) deals involving Japanese companies, especially inbound transactions, are expected to accelerate as the country opens up to more foreign capital ahead of the Tokyo Olympics in 2020, they said. (Reuters)

Japan M&A volumes are set to break a 19-year-old record and steal the spotlight in Asia this year from cooling Chinese deals, led by blockbuster takeovers such as Takeda Pharma’s $62 billion swoop on British drugmaker Shire.Slowing growth at home and mountains of accumulated cash are pushing Japan Inc to scout for targets abroad in sectors spanning financials, consumer, industrials, renewable energy, technology and pharmaceuticals, bankers and lawyers said.
Merger and acquisition (M&A) deals involving Japanese companies, especially inbound transactions, are expected to accelerate as the country opens up to more foreign capital ahead of the Tokyo Olympics in 2020, they said.

Japanese firms were involved in a record $289.7 billion of deals in the first nine months of 2018, more than doubling from the same period last year and exceeding the previous all-time high of 1999, Thomson Reuters data showed. “Japanese corporates are now getting used to doing acquisitions and some managements have got more confidence in doing mega deals rather than small transactions,” said Tatsuhiko Kamiyama, a Tokyo-based partner at law firm Clifford Chance.
The hectic activity is helping the investment banking divisions of Western banks.

Morgan Stanley’s Japan venture with Mitsubishi UFJ retained top spot in the country’s ranking for the first three quarters, data showed. The U.S. bank also topped the Asia ex-Japan M&A league table, followed by UBS and Goldman Sachs. Japan Inc announced total deals of $242.2 billion in 1999 after the country relaxed its anti-monopoly law, introduced the stock swap system and launched tax benefits that favoured takeover activities.
Two decades later, Japan is again planning structural reforms to boost its growth amid a super-loose monetary policy and mass fiscal spending that have led to cheap funding costs and more shareholder accountability for corporates.

In the past quarter, a unit of Mitsubishi Chemical agreed to acquire Praxair’s European assets for 5 billion euros and Renesas Electronics struck a deal to buy Integrated Data Technology Inc for $6.7 billion. For the first time since 2014, Japan’s outbound M&A value, at $146 billion as of Sept 26, exceeded that of China’s, as dealmaking remains challenged in the world’s No.2 economy due to a tougher regulatory environment, funding constraints and yuan depreciation amid an ongoing Sino-U.S. trade war.

“Conclusion by Japan Inc is that local growth will be challenging to come by, and therefore an international strategy will be an important long-term requirement,” said Rohit Chatterji, JPMorgan’s co-head of Asia-Pacific M&A.

OLYMPICS BOOS Chinese firms announced $92 billion in outbound deals for the first three quarters, down 8 percent year-on-year. Chinese companies still attracted the most buyers in the region, with deal values involving a Chinese target slipping 1.3 percent to $352 billion. Investments into India and Australia also surged due to a few mega deals, including Walmart’s $16 billion acquisition of Indian e-commerce company Flipkart and a $9.5 billion takeover of Australia’s APA Group by a consortium led by Hong Kong’s CK Infrastructure Holdings.

Overall, the value of deals involving Asia Pacific companies hit $1.1 trillion in the first three quarters of 2018, still a record, the data showed.
“In deal volume terms it has not been a standout year for Asia (excluding Japan) but the activity has been quite balanced across the board in terms of sectors and geographies,” said James Tam, head of M&A, Asia Pacific at Morgan Stanley. China’s deleveraging drive is also providing opportunities for Japanese companies.
Last month, Orix Corp struck a $2.2 billion deal to buy a 30 percent stake in aircraft lessor Avolon holdings as its cash-strapped parent HNA Group trims holdings in its core assets.

“China’s aggressive M&A push into the overseas markets is slowing, and that’s good for the other companies in the region, in particular Japanese companies,” said Mayooran Elalingam, head of M&A, Asia Pacific, at Deutsche Bank. Dealmakers are counting on the 2020 Tokyo Olympic Games to give inbound investments a further boost.
“2020 Olympics and the approval of integrated resorts are huge drivers for Japan … Hotels, tourism, casino, power sectors are expected to see more deals happening,” said Lisa Christoffers Yano, a Tokyo-based partner at Hogan Lovells.

Read more: Japan Inc’s global push drives Asia M&As,...

solar energy, solar scheme The original deadline was August 20 and there were three extensions earlier.(Reuters)

The Solar Energy Corporation of India (SECI) has extended the deadline for receiving bids for the government’s manufacturing-linked solar scheme to October 12. A senior SECI official told FE that the postponement was done “on the request of few bidders”.

The original deadline was August 20 and there were three extensions earlier.

Through the scheme, as much as 3 GW of cumulative annual solar manufacturing units are seen to be set up over three years, resulting in 10 GW of new generating capacities.
The scheme was introduced to boost domestic solar manufacturing, where developers would be provided with assured power purchase agreements (PPA) against the capacity of solar module manufacturing plant they set up in the country.

“The scheme’s terms and conditions do not apportion the risks appropriately and we have asked SECI to look into these aspects,” an official from a potential bidder said on conditions of anonymity. “It would be difficult to source financing for the scheme because it is more difficult to get funding for setting up solar manufacturing plant, compared with solar development projects,” the person added.

To make the scheme attractive to developers, SECI has already eased a number of norms for firms potentially participating in the bids. Under the new amendments, the amount of bank guarantee to be submitted by the developers have been reduced by almost 25% to Rs 466 crore. The ceiling tariff for the auctions has also been cut to Rs 2.75/unit, instead of the Rs 2.93/unit set earlier. A single bidder can now bid for a minimum 600 MW manufacturing capacity, instead of 1 GW mandated earlier, to win 2 GW of solar power supply contracts.

SECI is currently discussing the scheme with the state authorities of Chhattisgarh, Andhra Pradesh, Karnataka and Uttar Pradesh. As FE reported earlier, as many as 29 companies participated in the pre-bid meeting for the scheme held in June. Participants of the meeting included representatives from Adani Green Energy, SoftBank Group’s SB Energy and global solar giant GCL.

To boost domestic manufacturing of solar component, the government has levied a 25% safeguard duty on import of solar cells — the basic ingredient needed to manufacture solar panels — for a year, ending July 19, 2019. Solar developers, who source 88% of the products though cheaper imported component, have expressed their fears of rising project cost amid the lack of inadequate domestic production capacity.

Read more: Manufacturing-linked solar scheme: Bids deadline...

solar, solar energy Indian companies are currently working to implement the government’s plan of commissioning at least 10,000 renewable energy-based micro- and mini-grid projects with a total capacity of 500 MW by 2022.

Indian companies can use their experience of setting up off-grid solar power plants in the country to emulate the same in Africa through the International Solar Alliance (ISA), power minister RK Singh said.

Speaking to FE about the first assembly of the ISA to be held from October 2 to 5, he said: “Many government representatives from Africa have expressed their interest in partnering with us to use solar technology for larger energy access.” The minister added that to enthuse companies to participate in Africa, the World Bank has mobilised $1 billion on a common risk-mitigation mechanism for solar projects through ISA.

Indian companies are currently working to implement the government’s plan of commissioning at least 10,000 renewable energy-based micro- and mini-grid projects with a total capacity of 500 MW by 2022. Growing at a CAGR of 17%, the global micro-grid market is expected to be worth $17.5 billion by 2025, research firms have pointed out. Villages in far-flung areas for which the costs of a grid-connected network are prohibitive, are setting up microgrids to meet their power needs in India. Similar situations exist in Africa and the Indian model can be replicated there, Singh said.

Three major events on renewable energy are coming up in the first week of October in the national capital: The first assembly of the International Solar Alliance, the second Indian Ocean Rim Association (IORA) renewable energy ministerial meeting, and the second global Renewable Energy Investment Meeting and Expo (REINVEST-2018). The three events will be inaugurated in a common function by Prime Minister Narendra Modi, in the presence of United Nations Secretary-General Antonio Guterres on October 2.

The ISA was launched jointly by Modi and Francois Hollande, then president of France, on November 30, 2015 in Paris, on the sidelines of the 21st Conference of Parties (CoP 21) to the United Nations Framework Convention on Climate Change.

“More than half of the 121 prospective member countries are already with us on ISA,” the minister said. Indian companies have already committed $7 million to ISA. Additionally Coal India and Power Finance Corporation are also expected to fund $1 million each in the organisation, while the India Trade Promotion Organisation would commit $2 million.

Read more: ISA can help Indian firms build solar projects...

Both Prime Minister Narendra Modi and French President Emmanuel Macron are selected in the Policy Leadership category for their pioneering work in championing the International Solar Alliance. India's Cochin International Airport - the world's first fully solar-powered airport - is also selected for the award in the Entrepreneurial Vision category.
Read more: Narendra Modi, Emmanuel Macron selected for UN's...

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