Mergers and acquisitions: Japanese investments abroad

We simplify financial analysis and help bridge the cultural differences in cross border M&A transactions.

Video transcript

Stephen Conwill:Japan is the most rapidly aging of the industrialized countries and as a result they’re looking for places to put their capital to make it work and in order to provide returns for the citizens as the country, in effect, moves into retirement. So that it’s not just the insurance industry but many of the industrial sectors are now investing abroad, trying to diversify their holdings abroad and that’s what the insurance industry is doing.

One unique aspect about doing cross-border M&A involving Japanese companies investing in Indonesia or Malaysia or Poland, is that in that type of transaction there’s a tremendous cultural difference between buyer and seller. And one of the functions we provide in addition to simplify the financial analysis is to help bridge the cultural difference that exists between the two parties.

One of the key issues in any merger/acquisition is the integration following the transaction. If you bought a company, how do you manage going forward? Do you pretty much give the existing management the car keys and let them drive or did you bring in your own management? Do you do a lot of restructuring? And some of the ERM tools that we’ve developed, especially the network analysis really helps us understand the human dynamics of the business and in particular the compatibility of the target company, the company that’s been acquired, with the company that’s purchased, and that will yield some interesting insights into how you should manage going forward and make sure the buyer and seller are very compatible and can really achieve the best synergies.