Japanese M&A deals in the UK hit $9.5bn last year

Nikkei's purchase of the Financial Times helped Japanese acquisitions in the UK reach $9.5bn (£6.6bn) last year, according to new analysis from Deloitte.

The figure is the highest level this century and dwarfs the $0.67bn in Japanese UK deals recorded for 2014, the accountancy firm's research shows.

Nikkei, Japan's largest media company, announced last July that it was buying the FT Group from Pearson for £844m, as part of its strategy to increase its international presence.

Japanese buyers have been shopping all over the globe last year, totting up $67.7bn of outbound M&A deals worldwide.

This means that outbound M&A equated for 53 per cent of Japan's deal activity in 2015 – overtaking domestic deals for the first time since 2000.

This looks set to continue with outbound Japanese M&A already hitting $4.8bn this year, following the recent offer by Asahi for three Anheuser-Busch InBev beer brands – Peroni, Grolsch and UK craft brewer Meantime.

Japan's Mitsubishi bought a 25 per cent stake in South Staffordshire Group (the parent company of water firms South Staffs Water and Cambridge Water) from private equity giant KKR earlier this month, although the value of the deal was not disclosed.

Iain Macmillan, head of global M&A at Deloitte, commented: “With Japan expected to adopt negative interest rates, cheaper borrowing costs will fuel more acquisitions outside its own territory.

“Japanese acquirers are already compelled to look abroad faced with a shrinking home market, compounded by a decline in real earnings and an ageing population.

“Last year a series of outbound deals including Nikkei’s $1.3bn acquisition of the Financial Times from Pearson, and now Asahi’s acquisition of various iconic beer brands, including one in our own backyard in Greenwich.

“We estimate that the Nikkei 225 non-financial constituents currently hold $507bn in cash reserves, the second highest amount after the US corporate sector, so foreign targets hold a considerable appeal.”

Japan's economy contracted in the last quarter of 2014, official figures showed yesterday, due to weaker domestic demand and slowed investment in housing.

Conversely, from the UK to Japan, there were $0.57bn of M&A deals last year.

Full story: Japanese M&A deals in the UK hit $9.5bn last year: City A.M.

JefferiesAnd the Best Place to Work in the global financial markets 2018 is...

Register for HITC Business News