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Higher M&A activity

In January, Nomura Securities reported that the number of Japanese companies targeting foreign companies in M&A activity in 2005 increased by 16.4 percent from the previous year to 333, reaching the highest level since 1990.

The total number of M&A deals involving Japanese firms grew by 8.1 percent to 2,308 in 2005, increasing to a value of 15 trillion yen, a new annual record.

The amended Corporate Law, which went into effect May 1 of this year, may encourage this activity.  A subsidiary of a foreign company will be able to engage in triangular mergers, using shares of its parent company to acquire a Japanese company.  To give target companies time to develop proper defense measures, provisions allowing triangular mergers will be enacted in May 2007.

Expanded Companies

The following foreign companies have set up offices in Japan in light of this increase in M&A activity.

InvestorCom Inc. – New York, NY
•  Business:  Shareholder services, stock surveillance, proxy solicitation, corporate governance consulting, information agent services, investor relations
•  End of 2005 – Opened Japan office
•  Expects a rise in demand for proxy solicitation services among Japanese companies (Nikkei Weekly)

Kohlberg Kravis Roberts & Co. – New York, NY
•  Business:  Private equity
•  Opened its Tokyo office earlier this year
•  "The Asian markets will have pivotal global significance in the coming decades and will offer significant investment opportunities for both KKR [Kohlberg Kravis Roberts & Co.] and our existing portfolio companies." -- Henry Kravis, KKR founding member (KKR press release)

The Bridgeford Group and Evercore Partners – New York, NY
•  Business:  M&A advisory
•  February 2006 – The two companies formed a strategic alliance with Mizuho Securities to offer cross-border M&A advisory services in Japan and North America (Bridgeford press release)

Proxy Governance Inc. – Vienna, VA
•  Business: Shareholder advocacy
•  March 2006 – Set up Japanese unit in Tokyo to service the growing demand for advice on Japanese stocks and corporate M&As
•  Conducts proxy analyses of the 225 companies adopted in the barometer Nikkei Stock Average; based on the analyses, the U.S. parent will compile opinions on whether shareholders should approve, reject or abstain from voting for each proposal and send them to nearly 100 client institutional investors in Europe and the U.S. (Nikkei Weekly)

Altman Group - Lyndhurst, NJ
•  Business:  Proxy solicitation
•  Tied up with Nikko Investor Relations Co. to persuade shareholders to vote for merger and takeover proposals (Nikkei Weekly)