Infrastructure investors know today’s market for investments is crowded, but a commentary by M&A specialists at White & Case report in Japanese companies setting records for outbound M&A the competition may be getting even more challenging, as Japanese corporations are increasingly venturing outside their domestic market for acquisitions. Policy put in place by the Abe administration during the past five years is encouraging this investment.
“To attract investors to Japanese companies and elevate the stock market, the reforms promoted capital efficiency and emphasis on return on equity in particular,” White & Case reports. “With Japanese companies now armed with capital surpluses, two trends are playing out: Share buybacks are at an all-time high, reaching $55.6 billion in 2018, and Japanese companies have become more acquisitive overseas than ever before.”
Japanese buyers sent $175.5 billion into international markets for acquisitions in 2018, which is the highest amount ever, outpacing 2012’s previous record of $115.6 billion.
One of the largest deals in 2018 was Hitachi’s buying a majority stake in the power grid business of Swiss electronics and engineering group ABB for $9.4 billion.
CNN, meanwhile, reports the Abe administration has committed to investing $20 billion in Africa during the next three years.
“Japan is not new to investment in Africa,” CNN reports. “For more than 30 years, the country has focused its efforts on providing economic aid to African countries. … Now, it wants a partnership that involves more than just aid — adding infrastructure and human resource development.”
Last year, Japan partnered with Kenya to build a geothermal expansion power generation plant.
The Times of India reports 26 Indian startup companies also pitched their strategies to more than 125 Japanese institutional investors at Nasscom’s Japan VC Network in September. Some of the companies making their pitch for capital included
Aibono Smart Farming, ASIMOV Robotics Pvt Ltd, FreightBro Logistics, HealthifyMe Wellness and HyperXchange.
