Taiwan's IT industry targets long-established Japanese manufacturers, Nissan and Shibaura Electronics are acquisition targets
A representative example of large-scale M&A involving Japanese manufacturers and Taiwanese companies is the acquisition of Sharp by Hon Hai Precision Industry Co., Ltd. (Foxconn), the world's largest EMS company, in 2016. Currently, Hon Hai has expressed interest in acquiring Nissan Motors, while on February 5, Taiwanese electronic parts giant Yageo also announced its intention to make a tender offer for Shibaura Electronics, a mid-sized electronic parts manufacturer.
While uncertainties persist regarding Hon Hai's potential acquisition of Nissan (Hon Hai's chairman, Young Liu, tempered expectations on February 12 by stating, "We are considering collaboration, not acquisition"), Yageo's proposed tender offer for Shibaura Electronics appears plausible, given the significant increase in Shibaura Electronics' stock price. The Tender Offer will proceed without Shibaura Mechatronics' approval as a Nikkei report from February 10 suggested that "the seemingly aggressive approach indicates a strong desire to acquire Shibaura Electronics' leading semiconductor temperature sensor technology."
Overall, this development underscores the growing influence of Taiwan's IT industry and the challenges faced by well-established Japanese manufacturers. Amidst Nippon Steel's attempt to acquire the American steel giant U.S. Steel, President Trump recently rejected the notion of the company becoming a subsidiary, stating that he would not allow a majority stake. As the tables turn and a Japanese company is acquired by a Taiwanese entity, it will be intriguing to observe the progression of this M&A transaction.
China: Government to begin full-scale rescue of real estate developers, injecting $6.8 billion into struggling China Vanke
The Chinese government has implemented various support measures since last year to stimulate the sluggish real estate market, including reducing the loan down payment ratio and introducing a "white list" system that prioritizes real estate projects for bank loans. Despite these efforts, a full-scale recovery has yet to materialize, prompting industry insiders to advocate for a significant infusion of public funds to directly aid struggling major developers. Speculation has arisen that Chinese authorities are contemplating a plan to assume the substantial debts of prominent developer China Vanke.
Reports suggest that local governments aim to utilize the 20 billion yuan issuance limit of special bonds to purchase China Vanke's unsold inventory and unused land parcels, mitigating a potential liquidity shortfall of 50 billion yuan (approximately $6.8 billion or 1 trillion yen) facing China Vanke this year and enabling the company to meet its impending debt obligations.
The assistance extended to China Vanke is seen as a preventative measure to avoid the challenges encountered by other major private developers like China Evergrande Group, whose financial condition has significantly deteriorated. Despite facing maturing bonds totaling $4.9 billion (approximately 750 billion yen) this year, China Vanke is grappling with funding constraints due to sluggish property sales. The effectiveness of China Vanke's support plan will be closely monitored as it aims to provide a substantial lifeline to the real estate sector, a cornerstone of the Chinese economy.
ASEAN: Attention on cosmetic surgery market increases, business alliances and M&A activity picks up
As income levels rise, ASEAN countries are now transforming from manufacturing bases into major consumer markets, and one of the trends that symbolizes this is the rise of the cosmetic surgery business.
With the increasing income levels driven by economic growth in the Association of Southeast Asian Nations (ASEAN), the cosmetic surgery industry is gaining momentum. Masterstyle, a publicly listed company operating the cosmetic surgery clinic "Masterpiece Hospital" in Thailand, recently announced its expansion into the Indonesian market in collaboration with local company Lumeo Health. The company aims to establish a dominant position in the Southeast Asian cosmetic surgery market. According to Masterstyle, Indonesia's cosmetic surgery market is projected to reach 175 million baht (approximately 802 million yen) by 2024, showing significant growth from the previous year's 35 million baht.
Japanese firms are also entering the ASEAN cosmetic surgery sector. SBC Medical Group Holdings, based in Shinjuku-ku, Tokyo, specializing in medical consulting, acquired Aesthetic Healthcare Holdings (AHH) last November. AHH operates a chain of beauty medical clinics in Singapore, with plans to expand its Asian operations using Singapore as a strategic hub. With 21 clinics and beauty salons under four brands, AHH serves in Singapore, known for having the highest per capita income in ASEAN. SBC Medical intends to boost its presence in Asian markets, leveraging the strong brand image of AHH.
As income levels rise, ASEAN nations are transitioning from manufacturing hubs to significant consumer markets, with the burgeoning cosmetic surgery sector symbolizing this transformation.
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