On 12 May 2023 Nippon Express (TSE:9147) announced the approval by the Board of Directors to acquire a majority of the Austrian logistics group Cargo-Partner Group Holdings AG and its subsidiaries. In total Nippon Express acquires 63 companies, the holding company Cargo-Partner Group Holding AG, and 62 subsidiary companies. In one of these a minority share holder remains.

From Nippon Express point of view, the acquisition’ purpose is to expand Nippon Express’ logistics network and resources globally, and especially in Europe, implementing “Nippon Express Group Business plan 2023 – Dynamic Growth”, which was presented in 2018/2019.

Interestingly, Nippon Express expects also to learn from Cargo-Partner’s know-how in digitization and IT systems and operational efficiency.

The acquisition is via a special purpose company, a wholly owned subsidiary of Nippon Express Europe GmbH.

Purchase price: on the order of EURO 1400 Million

EURO 845 million for ordinary shares of Cargo-Partner Group Holdings AG and its subsidiaries (a total of 63 companies), to be adjusted according to net debt and working capital.

In addition a maximum of EURO 555 million “earn-out”, conditional on Cargo-Partner’s earnings reaching certain thresholds.

Thus the total acquisition price may be on the order of EURO 1400 Million (depending on debt and working capital adjustments, and earnings).

The acquisition depends on certain conditions, and is also subject to antitrust approval.

Closing: expected November 2023 – May 2024.

Cargo-Partner Group Holdings AG

Today’s Cargo-Partner Group was initially founded in 1983 by CEO Stefan Krauter as “air cargo partner” with 5 founding employees at Vienna Airport in Wien-Schwechat. CEO Stefan Krauter, has announced since mid-2022, that he was planning to step down, and Cargo-Partners has been considering new ownership since then, see: https://www.aircargonews.net/business/cargo-partner-in-line-for-new-ownership-as-stefan-krauter-steps-down/

• consolidated revenues:
  • 2020: EURO 1050 million
  • 2021: EURO 1806 million
  • 2022: EURO 2063 million
• consolidated net income:
  • 2020: EURO 35 million
  • 2021: EURO 88 million
  • 2022: EURO 54 million

Cargo-Partner: https://www.cargo-partner.com/

Nippon Express Holdings KK (NIPPON EXPRESSホルディングス株式会社) (TSE:9147)

Nippon Tsu-un (日本通運、English: Nippon Express) was founded in 1937 on the basis of the “Nippon Tsu-un Company Law” as a semi-government logistics company by combining a number of smaller companies. Nippon Tsu-un’s origins go back to the company Riku-un Moto Kaisha (陸運元会社), founded in June 1872. Nippon Tsu-un was privatized and listed on the Tokyo Stock Exchange on 16 February 1950 (No. 9062).

On January 4, 2022, the company Nippon Express Holdings KK was incorporated, and Nippon Tsu-un (TSE:9062) was delisted from Tokyo Stock Exchange on 29 December 2021, and became a fully owned subsidiary of Nippon Express Holdings KK (TSE:9147).

Market capitalization: YEN 751 billion (= US$ 5.6 billion, EURO 5 billion)

https://www.nipponexpress-holdings.com/en/?_langEN

https://www.nipponexpress-holdings.com/ja/?_langJP

https://www.nipponexpress.com/about/

https://en.wikipedia.org/wiki/Nippon_Express

Copyright 2023 Eurotechnology Japan KK. All Rights Reserved.

Despite being the world’s third largest market, many businesses struggle to break into Japan. The “Growing your Business in Japan” free webinar, organized by the SCI’s Science and Enterprise Group and powered by LabLinks, will provide valuable insights into the challenges of growing a chemistry-facing business in the Japanese market, and how they can be overcome. 
 The host, Dr Alan Steven – Chief Scientist at CatSci Ltd and Co-founder of LabLinks, will be joined by: 

• Dr Gerhard Fasol – CEO and Producer, Eurotechnology Japan
• Dr Charlotte Crowhurst – Patent Attorney, Potter Clarkson
• Dr Peter Tiffin – VP CMC, Taiho Oncology Europe (TOE)

Featuring speakers with pharma, intellectual property and entrepreneurship backgrounds, this webinar is a great opportunity to learn about the potential strategic pitfalls when entering the Japanese market and how Japanese culture can affect how a business performs in Japan.
The free webinar will be held on Tuesday 31^st January 2023 at 09:00 – 11:00 GMT

Do not miss the opportunity to meet the speakers, network, participate in open discussions, and gain first hand knowledge on how to successfully enter the Japanese market. 

You can access the programme here. 

On 1 July 2022 NEC acquired Irish company Aspire Technology, financial terms were not disclosed, but we estimate company value on the order of €2 million.

Aspire Technology

• CEO and Founder: Bill Walsh
• https://www.aspiretechnology.com/

Funding

• 2016, initial investment €1,000
• 2017 €1,050,000 in state aid from Enterprise Ireland
• March 2020 €540,000 R&D grant from EI
• estimated company value €1.8 million

NEC

https://en.wikipedia.org/wiki/NEC

Copyright 2022 Eurotechnology Japan KK. All Rights Reserved.

Fujirebio acquires Belgian ADx NeuroSciences for € 40 million, closing expected for July 2022.

ADx NeuroSciences

• CEO and Founder: Koen Dewaele
• https://adxneurosciences.com/about-us/management-team/
• https://adxneurosciences.com/about-us/

Fujirebio Holdings KK (富士レビオ・ホールディングス株式会社)

• Founded December 1950 as 富士臓器製薬株式会社 (Fujizoki Pharmaceutical), first product was a HA Ag TPHA kit, the world’s first hemagglutination test for syphilis testing.
• April 1983 the company name was changed to Fujirebio KK (富士レビオ株式会社), and in September 1983 Fujirebio went public with an IPO on the Tokyo Stock Exchange (Second Section) and advanced to the Tokyo Stock Exchange (First Section) in June 1987
• In April 2017 the company became part of the newly established company Fujirebio Holdings KK (富士レビオ・ホールディングス株式会社)
• In July 2017 Fujirebio Holdings KK became 100% subsidiary of Nomiraka Holdings KK, today named: H.U. Group Holdings, Inc. (H.U.グループホールディングス株式会社)
• 100% subsidiary of H.U. Group Holdings, Inc. (H.U.グループホールディングス株式会社)
• specialized on developing, manufacturing and marketing of in vitro diagnostics (IVD) products.
• Employees: 2040 (as of end March 2019)
• https://en.wikipedia.org/wiki/Fujirebio
• https://www.fujirebio.com

H.U. Group Holdings, Inc. (H.U.グループホールディングス株式会社)

• Tokyo Stock Exchange (Prime Section, No 4544)
• Employees: 5897 (March 2021)
• https://www.hugp.com/
• https://ja.wikipedia.org/wiki/H.U.%E3%82%B0%E3%83%AB%E3%83%BC%E3%83%97%E3%83%9B%E3%83%BC%E3%83%AB%E3%83%87%E3%82%A3%E3%83%B3%E3%82%B0%E3%82%B9

Copyright 2022 Eurotechnology Japan KK. All Rights Reserved.

Asahi Kasei Medical announced the acquisition of Austrian contract research firm ViruSure Forschung und Entwicklung GmbH based in Vienna (Austria).

ViruSure Forschung und Entwicklung GmbH

• Operations Director: Dr Andrew C Bailey,
• Finance and Administration Director: Dr Alexander Vodopivec
• Team members: approx 45 (as of Sept 2018)
• Investors: PP Capital AG
• http://www.virusure.com

Asahi Kasei Medical KK (旭化成メディカル株式会社)

• Founded July 24, 1974
• 100% subsidiary of Asahi Kasei KK
• Employees: 2040 (as of end March 2019)
• http://www.asahi-kasei.co.jp/medical/en/
• http://www.ak-bio.com/

Business divisions

• Dialysis: global leader driving progress in dialysis therapy
• Therapeutic Aphaeresis: making therapeutic aphaeresis available worldwide to expand treatment options and possibilities
• Blood transfusion: reducing blood transfusion risk and heightening trust in healthcare
• Bio-processes: expanding availability of high-quality drugs by enhancing safety in biopharmaceutical production

Copyright 2019 Eurotechnology Japan KK. All Rights Reserved.

KMD (originally Kommunedata)

• founded in 1972 by the merger of municipal IT centers.
• 1972 – 2009 owned by the national association of municipalities (Kommunernes Landsforening (KL))
• 2009 sold to EQT Partners (85%) and Arbejdsmarkedets Tillægspension (ATP) (15%) for DKK 2 billion (approx. US$ 310 million). During 2019-2012 KMD was transformed from a government sector organization to a private sector company.
• 2012 EQT and ATP sold KMD to Advent International
• 2018/2019 Advent International sold KMD to NEC for about 8 billion Danish Kroner (approx. US$ 1.2 billion)

• Employees: 3000
• Revenues: DKK 4.7 billion (2013)
• Net income: DKK 64 million (2013)

Copyright (c) 2019 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

World’s largest air-conditioning equipment maker expands to Europe

On Monday 26 November 2018 Daikin Industries Ltd announced the planned acquisition of AHT Cooling Systems for €881m (approx. 100 billion YEN).

Daikin Industries Ltd [TYO:6367], slogan: “The Future in Your Hand”

Daikin Industries Ltd was founded in 1924 as Osaka Kinzoku Kogpyosho LP by Akira Yamada in Osaka.
1963 the name was changed to Daikin Kogyo Co Ltd, and
in 1982 the name was changed to Daikin Industries Ltd.

AHT Cooling Systems GmbH

AHT is an abbreviation for Austria Haustechnik (Austrian home technologies), and its headquarters are in Rottenmann (Steiermark, Austria). AHT produces refrigerators and freezers, 60% of sales are refrigerators and freezers for super markets. German discount supermarket giants Aldi and Lidl are among AHT’s customers.

In 1998 AHT listed with an IPO on the Vienna Stock Exchange.
In 2003, AHT was fully acquired by Quadriga Capital for € 35 Million and delisted.
Quadriga sold AHT to Germany Investment Firm Equita.
In 2006, Quadriga acquired AHT back from Equita, and in Mai 2013 was reported to seek selling AHT for at least € 450 Million.

Annual sales:
€ 222.7 Million (2011)
€ 380 Million (2015)

Employees: 1250 (global)
CEO: Thomas Babacan
COO: Frank Elsen

Copyright (c) 2018 Eurotechnology Japan KK All Rights Reserved

Vekoma Rides Manufacturing BV

Vekoma Rides was founded in 1926, initially producing farming and mining equipment. Today Vekoma produces roller coasters and amusement park equipment including the Junior Coaster, the Suspended Family Coaster, Boomerang, Suspended Looping Coaster, Flying Dutchman, and others.

https://www.vekoma.com/

Sansei Technologies KK 三精テクノロジーズ株式会社 [TYO:6357]

Sansei Technologies KK (三精テクノロジーズ株式会社) is based in Osaka (Japan), listed on the Tokyo Stock Exhange (No 6357), market cap on the order of ¥15 billion (US$ 100 million).

Sansei was founded on 27 February 1951, and is focused on planning, designiing, manufacturing, installing, repairing and maintenance of amusement park rides and roller coasters, elevators, theatre stage equipment and similar equipment.

https://www.sansei-technologies.com/

(c) 2018-2022 Eurotechnology Japan KK. all rights reserved.

by Gerhard Fasol

Irish wind energy €300m investment

Irish wind energy investments were announced by trading company Sojitz, Mitsubishi UFJ Lease & Finance and Kansai Electric Power Corporation.

Sojitz, Mitsubishi UFJ Lease & Finance and Kansai Electric Power Corporation have established the special purpose company ShaMrocK Wind Limited.

ShaMrocK Wind Limited will acquire 60% of shares in Evalair Wind Limited from Invisible Energy for a reported €300m, valuing Evalair Wind Limited at €500m.

Note the interesting composition of the Japanese investment joint venture ShaMrocK Wind Limited: the Japanese trading company Sojitz, the Mitsubishi group leasing unit, and Kansai Electric Power Corporation. In this combination, Sojitz contributes international business experience and know-how, and private-equity type investment know-how, Mitsubishi’s leasing unit provides financing know-how, while Kansai Electric Power contributes electricity operator know-how. At the same time, the Japanese consortium gains wind power knowledge, since wind power development in Japan is in relatively earlier stages of development than in Europe, see: https://www.eurotechnology.com/store/j_renewable/

Evalair Wind Limited

Evalair Wind Limited is a wind power plant operating company.

Directors: Michael Murnane, David Murnane

Share holders

• ShaMrocK Limited: 60%
• Invis Energy (JV between Michael Murnane, Craydel Group, HG Capital): 40%

Invis/Evalair Wind power: 5 plants, 223.4MW, 97 turbines

1. Knocknagoum, County Kerry
   • 44.4 MW
   • turbines: 26 (4 x Vestas V90 2MW; 5 x Vestas V90 3MW; 6 x Vestas V80 2MW; 11 x Vestas V52 0.85MW)
   • Energy yield: 133.1 GWh/Year
   • Capacity factor: 34%
2. Leitir Guingaid Leitir Peic, County Galway
   • 44.0 MW
   • turbines: 17 (10 x Enercon E82 2.3MW (LG); 7 x Enercon E82 3MW (LP))
   • Energy yield: 134.4 GWh/Year
   • Capacity factor: 35%
3. Knockduff, County Cork
   • 65.0 MW
   • turbines: 26 (Nordex N90 2.5MW)
   • Energy yield: 229.9 GWh/Year
   • Capacity factor: 40%
4. Killaveenoge, County Cork
   • 25.0 MW
   • turbines: 10 (Nordex N90 2.5MW)
   • Energy yield: 80.5 GWh/Year
   • Capacity factor: 37%
5. Slievecallan West, County Clare
   • 45.0 MW
   • turbines: 18 (Nordex N90 2.5MW)
   • Energy yield: 170.0 GWh/Year
   • Capacity factor: 43%

ShaMrocK Wind Limited

ShaMrocK Wind Limited is a special purpose company to invest in Evalair Ltd.

Headquarter: London
Incorporated: 24 July 2017

Shareholding:

• Mirai Power Europe Limited: 48.8%
  • Sojitz Corporation: 75%
  • Sojitz Europe plc: 25%
• KPIC Netherlands B.V (wholly owned by Kansai Electric Power Co., Inc.): 40%
• Mitsubishi UFJ Lease & Finance Company Limited: 11.2%

Renewable energy Japan – research report

Copyright (c) 2017 Eurotechnology Japan KK All Rights Reserved

Dentsu acquires Gleam Futures: invests to acquire 90% ownership

Dentsu acquires Gleam Futures, who “develop, monetize & protect” digital-first talent, ie mainly YouTube focused stars.

Japanese companies have a dramatically different culture than Western, European or US companies, and Dentsu is one of Japan’s more traditional companies, at the same time home to Japanese creative talent.

To bridge this gap in cultures, Dentsu acquired the French/UK company Aegis Group plc on 5 July 2012, creating Dentsu Aegis Network. Dentsu has used Dentsu Aegis Network as a bridge head for many acquisitions in Europe and the Mediterranean are, bridging cultural differences.

Gleam Futures: “We manage digital-first talent”

Gleam Futures describe their business as “we develop, monetize & protect” digital-first talent, e.g. YouTube stars.

• Established: 2010
• Employees: 37
• Talents: 40
• Combined subscriber base: approx. 60 million
• Revenues: UK Pounds 4.35 million (Fiscal Year ending Dec 2016
• Founder & CEO: Dominic Smales

Zoella

11,838,878 subscribers as of 22 June 2017

Caspar Lee

7,197,168 subscribers as of 22 June 2017

Marcus Butler

4,611,346 subscribers as of 22 June 2017

Total: approx. 60 million subscribers

Copyright (c) 2017 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Roche acquires Chugai: Roche KK merges into Chugai in a carefully structured process, with Chugai the surviving company

Roche acquires Chugai in a series of carefully crafted transactions, to expand in the world’s second largest pharmaceutical market, Japan. Japan’s pharmaceutical market size is estimated at YEN 8000 – 1,200 billion (US$ 80 billion – US$ 120 billion), depending on the source and methods of estimation, corresponding to about 10% of the global pharmaceutical markets.

Growth of Japan’s pharmaceutical markets are about 2% per year, thus expected to grow to about US$ 130 billion by 2018. Different studies give different estimates for the size of Japan’s pharmaceutical market.

Roche acquires Chugai. First stage. December 2001/October 2002. Roche acquires 50.1% of Chugai and merges Nippon Roche KK into Chugai

In 2001, Roche and Chugai agreed for Roche to acquire 50.1% of Chugai for YEN 155 – 198 billion (US$ 1.23 – 1.58 billion). Basic agreement was signed in December 2001.

The merger of Nippon Roche into Chugai, which Chugai the surviving company and the full start of the alliance was in October 2002. Chugai maintains autonomous management, and listing on the Tokyo Stock Exchange.

Roche and Chugai entered into a double licensing agreement, where Roche licenses products from Chugai for international distribution, and vv Chugai licenses products from Roche for distribution in Japan:

• Chugai has first refusal rights to develop and sell Roche products in Japan
• Roche has first refusal rights to develop and sell Chugai products in Japan, with some territorial exceptions

Also agreed were limits on Roche’s shareholding in Chugai:

• 1 Oct 2002 – 30 Sept 2007: maximum shareholding 50.1%
• 1 Oct 2007 – 30 Sept 2012: maximum shareholding 59.9%
• from 1 Oct 2012: Roche will cooperate to maintain Chugai’s stock market listing in Japan

Roche acquires Chugai. Second stage. 2008 Roche increases share holding in Chugai to 59.9%

Roche acquires Chugai. Third stage: Roche currently holds 61.62% of Chugai

Although there have been press reports speculating that Roche plans to acquire all of Chugai, currently Roche holds 61.62% of Chugai.

Chugai Pharmaceutical Company Ltd (中外製薬株式会社)

Chugai Pharmaceutical Company Ltd is (中外製薬株式会社) listed on the Tokyo Stock Exchange, Code 4519.

Market cap is YEN 2,360 billion (approx. US$ 24 billion) as of 26 May 2017. Chugai employs 7245 people as of 31 December 2016, achieving sales/revenues of YEN 492 billion (approx. US$ 5 billion).

Chugai was founded on 10 March 1925, and established in the current form on 8 March 1943.

Roche in Japan

• 1899: Roche is the first Western pharmaceutical company to start business in Japan, establishes a network of sales representatives
• 1904: Karl Rhode Company becomes distributor of Roche in Japan
• 7 July 1924: Roche incorporates a subsidiary in Japan, Roche Gomeikaisha
• 1924-1939: Dr Alice Keller, Head of Roche Japan
• 1932: Nippon Roche KK founded
• 2001/2002: Roche acquires 50.1% of Chugai, merges Nippon Roche KK into Chugai. Chugai is the surviving company, and remains under autonomous management and listed on the Tokyo Stock Exchange

Copyright (c) 2017 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

ISOLITE acquired by Hitachi Chemical to build global speciality insulation materials group

ISOLITE acquired by Hitachi Chemical from private equity fund HQ Equita, as announced on 27 and 28 April 2017.

Isolite – High Temperature Solutions

Isolite produces and sells a range of insulation materials and solutions specifically for the high temperature sector up to 1600C for the automotive, aircraft and other industrial sectors.

• Isolite GmbH
• CEO: Christian Eck
• founded: 1997
• employees: 410
• patents: 12
• manufacture and sales of thermal insulations for automobiles, aircraft, and other industrial applications
• http://isolite.de/

HQ Equita

HQ Equita is a mid-cap buyout firm of HQ Capital, related to the German Harald Quandt Family Office.

• http://hqequita.com

More about Hitachi and Japan’s electronics industries

Copyright (c) 2017 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Sanofi acquires SSP (エスエス製薬株式会社), a Japanese OTC pharmaceutical company, founded as a pharmacy in Tokyo in 1765

Boehringer Ingelheim had acquired SSP (エスエス製薬株式会社), a Japanese OTC pharma company founded originally in 1765 as a pharmacy in Yaesu, Tokyo, starting with business cooperation, followed by staged investment over a period of five years, starting in 1995, followed by a Take-Over-Bid and delisting of SSP from the Tokyo Stock Exchange in 2010.

For details of Boehringer’s acquisition of SSP, see: http://eu-japan.com/2010/12/boehringer-ingelheim-ssp/

On 1 January 2017 as part of a global asset swap of Boehringer Ingelheim with Sanofi, SSP becomes a subsidiary of the French pharmaceutical group Sanofi (サノフィ株式会社)

SSP (エスエス製薬株式会社), founded in 1765

History, and acquisition steps by Boehringer Ingelheim:

• SSP (エスエス製薬株式会社) was founded in 1765 as a pharmacy in Yaesu, Tokyo
• On 29 October 1927 the company was incorporated as （株）瓢箪屋薬房
• In 1940 the company name was changed to (エスエス製薬株式会社)
• 1969 IPO on the 2nd section of the Tokyo Stock Exchange
• 1971 IPO on the 1st section of the Tokyo Stock Exchange
• 1995-1996 Boehringer Ingelheim invests in SSP, and becomes largest share holder
• 2001 Boehringer Ingelheim increases shareholding to above 50%
• 15 February 2010 Boehringer Ingelheim Japan Investment GK (ベーリンガーインゲルハイム・ジャパン・インベストメント合同会社) issues a Take-Over-Bid (TOB), which is concluded on 15 April 2010, resulting in Boehringer Ingelheim Investment Japan acquiring a total of 93% of SSP shares.
• 16 July 2010 SSP is delisted from Tokyo Stock Exchange
• 1 October 2010 merger with Boehringer Ingelheim Japan Investment GK (ベーリンガーインゲルハイム・ジャパン・インベストメント合同会社)
• 19 November 2010 merger with BI Nippon Invest GK (BIニッポンインベスト合同会社)
• 19 November 2010 becomes subsidiary of Boehringer Ingelheim Japan KK (ベーリンガーインゲルハイムジャパン株式会社)
• 1 January 2017 as part of a global asset swap of Boehringer Ingelheim with Sanofi, SSP becomes a subsidiary of the French pharmaceutical group Sanofi (サノフィ株式会社)

Copyright (c) 2017 Eurotechnology Japan KK All Rights Reserved

• Pilsner Urquell (Czech Republic)
• Dreher Brewery (Hungary)
• Ursus Breweries (Romania)
• Tyskie Breweries (Poland)
• Lech (Poland)

Asahi Group Holdings (アサヒグループホールディングス株式会社)

• founded in 1889 in Osaka as the Osaka Beer Company (大阪麦酒会社)
• listed on Tokyo Stock Exchange (TSE2502)
• with about 38% market share, the largest of Japan’s top four breweries and beverage groups
• https://www.asahigroup-holdings.com/
• Employees: 287 (at Holding Company level)
• net sales (FY 2018) ¥2120.3 billion (US$ 21 billion)

Copyright (c) 2019 Eurotechnology Japan KK All Rights Reserved

• Peroni Nastro Azzurro: Birra Peroni Srl
• Royal Grolsch NV
• Meantime Brewing Company Ltd

Asahi Group Holdings (アサヒグループホールディングス株式会社)

• founded in 1889 in Osaka as the Osaka Beer Company (大阪麦酒会社)
• listed on Tokyo Stock Exchange (TSE2502)
• with about 38% market share, the largest of Japan’s top four breweries and beverage groups
• https://www.asahigroup-holdings.com/
• Employees: 287 (at Holding Company level)
• net sales (FY 2018) ¥2120.3 billion (US$ 21 billion)

Copyright (c) 2019 Eurotechnology Japan KK All Rights Reserved

Reinforcement materials for transportation, energy, infrastructure and consumer markets

On June 20, 2016 PPG and Nippon Electric Glass (NEG, TYO:5214) announced that Nippon Electric Glass will acquire PPG’s European fibre glass operations, subject to employee consultations, regulatory and other approvals. The acquisitions were completed on October 3, 2016.

PPG’s European Fibre glass operations employ approximately 550 people, and achieved about EURO 150 million in sales in 2015.

Nippon Electric Glass aims to expand its glass fibre business:

1. by acquiring production facilities in Europe
2. increasing the chopped glass fibre strands business
3. adding new glass fibre product lines

Total assets: approx. € 90 million
Total annual revenues: approx. € 150 million

PPG Industries Fiber Glass B.V., Westerbroek / Hoogezand

Energieweg 3, 9608 Westerbroek, Netherlands

Main products: chopped strands for reinforced plastics
Main markets: composite materials for auto parts

New name after acquisition: Electric Glass Fiber NL BV
Location: Hoogezand, Netherlands
Capital: € 16 million
Established: April 28, 1961
Ownership: 100% Nippon Electric Glass Co Ltd.

PPG Industries (UK) Ltd

132 Leigh Road, Hindley Green, Wigan, Lancashire WN2 4XG, United Kingdom, United Kingdom

Main products: direct rovings for reinforced plastics
Main markets: blades for wind power generation, composite materials for auto parts
approximately 220 employees (plus temporary staff)

New name after acquisition: Electric Glass Fiber UK Ltd.
Capital: UKL 30 million
Established: July 8, 2016
Ownership: 100% Nippon Electric Glass Co Ltd.

Seller: PPG (Pittsburgh Plate Glass)

Pittsburgh Plate Glass (PPG) was founded in 1883 in Pittsburgh, Pennsylvania, and today operates about 156 factories globally and in 2015 achieved revenues of around US$ 15.3 billion.

Acquirer: Nippon Electric Glass KK (NEG)

Nippon Electric Glass KK (NEG) was established in 1944 with an investment from NEC Corporation and others, and separated from NEC, and was incorporated as an independent company in 1949.

Today NEG has about US$ 2.4 billion in annual revenues and produces about 20% of the global production of glass for liquid crystal displays, and other speciality glass products.

Copyright (c) 2016 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

SoftBank acquires ARM: acquisition completed on 5 September 2016, following 10 years of “unreciprocated love” for ARM

On 18 July 2016 SoftBank announced a “Strategic Agreement”, that SoftBank plans to acquire ARM Holdings plc for £24.0 billion (US$ 31.4 billion, ¥ 3.3 trillion) paid as follows:

• Cash on Hand: £16.7 billion (US$ 12.5 billion, ¥ 2.3 trillion)
• Loans: £7.3 billion (US$ 9.5 billion, ¥ 1.0 trillion)
• Total: £24.0 billion (US$ 31.4 billion, ¥ 3.3 trillion)

(excluding 20.4 million shares (1.4%) that SoftBank already owned on 18 July 2016).

Acquisition schedule:

• 18 July 2016: Strategic agreement between SoftBank and ARM announced by SoftBank
• 5 September 2016: effective date of Scheme of acquisition
• 6 September 2016: ARM delisted, cancellation of listing of ARM shares
• 12 September 2016: cancellation of listing of ARM US Depositary shares (ADS)

Straight line from SoftBank’s acquisition of Vodafone-Japan to acquisition of ARM

In a detailed interview in Nikkei on 3 September 2016, Masayoshi son explained that he was interested in ARM ever since about 1906, when saw the paradigm shift from PC to mobile, when he discussed his designs for mobile internet handsets with Steve Jobs, and when he acquired Vodafone-Japan (see: Why did Vodafone fail in Japan? … and miss an opportunity of US$ 83 billion).

SoftBank’s acquisition of Vodafone Japan is explained here: Softbank acquires Vodafone Japan with co-investment from Yahoo KK

SoftBank’s acquisition of Vodafone Japan – in combination with having developed YAHOO-Japan into the leading internet service company in Japan – enabled SoftBank to become a key global player in mobile communications.

Masayoshi Son: unreciprocated love for ARM for 10 years

In the Nikkei interview of 3 September 2016, Masayoshi Son explains that he had an “one-sided / unreciprocated love for ARM” for at least 10 years, but decided to acquire SPRINT first. After acquiring SPRINT he had to pay down debt before being able to acquire ARM now.

ARM Holdings plc

ARM was founded on 27 November 1990 as Advanced RISC Machines, however the abbreviation ARM was first used in 1983 and initially meant “Acorn RISC Machines”.

Acorn Computers Ltd was founded in 1978 in Cambridge (UK) by Hermann Hauser and Chris Curry to produce computers, and its most famous product was the BBC Micro Computer.

ARM has built an ecosystem of IC design systems and platforms which are at the core of low energy consumption ICs and CPUs for smartphones and many other electronic devices and cars. ARM may become or already is one of the core technology companies for the Internet of Things (IoT).

SoftBank’s ARM Business Department’s name changed to “New Business Department”

On 3 September 2016 SoftBank announced that the name of SoftBank’s ARM Business Department has been changed to SoftBank New Business Department.

SoftBank today and 300 year vision report:

Copyright (c) 2016 Eurotechnology Japan KK All Rights Reserved

Toray management program Project AP-G 2016: “thorough implementation of growth strategy through innovation and aggressive management”

Toray acquires Delta-Tech: acquires 55% of outstanding shares of the Italian prepreg manufacturer Delta-Tech SpA including the fully owned subsidiary Delta-Preg SpA.

Delta-Tech SpA and Delta-Preg SpA

Delta-Tech SpA was founded in 1999 for products in the composite materials industry.

Delta-Tech product groups include:

• fabrics: woven carbon, multi axial stitched carbon, woven glass…
• UD tapes: HS carbon fiber, IM carbon fiber etc
• Kordo: pre-formed edging system
• SIMS: Semi-impregnated micro-sandwich, laminates based on the use of non-woven needle punched fabrics with micro-sandwich structures. Applications are automotive body panels and personal protection equipment

Delta-Preg SpA was founded in 2001 and manufactures textiles.

Pre-preg

Pre-Preg are pre-impregnated composite fibers with a matrix material such as epoxy.

Toray’s medium term management program “Project AP-G 2016” (from April 2014 to March 2017)

Toray’s Project AP-G 2016 is part of Toray’s long term vision “AP-Growth TORAY 2020“, and follows “Project AP-G 2013.

Thorough implementation of growth strategy through “innovation and aggressive management”.

Key benchmarks for FY 2016:

• Consolidated net sales: YEN 2.3 trillion (US$ 23 billion)
• Consolidated operating income: YEN 180 billion (US$ 1.8 billion)
• ROA 8%
• ROE 10%

Toray’s long term vision “AP-Growth TORAY 2020“: become “a global top company of advanced materials”

AP-Growth TORAY 2020 is a unified growth map for the next 10 years based on Toray’s corporate vision of “contributing to society through the creation of new value with innovative ideas, technologies and products”.

Key KPI’s for AP-Growth TORAY 2020 (to be achieved around 2020)

• consolidated net sales: YEN 3 trillion (US$ 30 billion)
• Consolidated operating income: YEN 300 billion (US$ 3 billion)
• Operating income margin: 10%
• ROA: 10%
• ROE: 13%

Toray Industries, Inc. (東レ株式会社) “Innovation by chemistry” (化学による革新と創造) (TSE 3402, LSE TKK)

Toray Industries, Inc. (東レ株式会社) was founded on 12 January 1926 with an investment by Mitsui Bussan. The company was incorporated as Touyou Rayon (東洋レーヨン) on 16 April 1926.

In 1970 the company name was changed to Toray KK (東レ株式会社). Toray is the abbreviation of Touyou Rayon (東洋レーヨン).

Toray’s main business are:

• fibers and textiles
• plastics and chemicals
• IT related products: films, color filters, products for IC production, graphics materials
• carbon fiber composites
• environment and engineering: water treatment membranes, materials for housing, environmental equipment
• life science
• other: analysis, research related services

Toray builds integrated supply chain in Europe

Through a program of acquisitions, Toray is building an integrated supply chain in Europe:

• Delta-Tech SpA and Delta-Prepreg SpA
• Saati SpA’s European carbon fiber fabric and prepreg business, renamed: Composite Materials (Italy) S.r.l., (CIT)
• Alcantara S.p.A.: Trading activities, manufacture and marketing of ALCANTARA®, unique covering material
• Toray Carbon Fibers Europe S.A. (CFE): polyacrylonitrile (PAN) precursor
• Toray Films Europe S.A.S. (TFE)
• Toray Textiles Central Europe s.r.o. (TTCE)
• Euro Advanced Carbon Fiber Composites GmbH (EACC): Manufacture and marketing of CFRP parts and components for automobile
• ACE Advanced Composite Engineering GmbH (ACE)
• Toray International Europe GmbH (TIEU)
• Toray Resins Europe GmbH (TREU): Import and sales of resin products
• Greenery GmbH: Development, manufacturing, and sales of fuel cells and water electrolysis components
• Toray Membrane Spain S.L. (TMSP): Marketing and consulting of water treatment membranes
• Toray Membrane Europe AG (TMEu): Importing and Sales of RO membrane element, UF/MF hollow fiber membrane module, and submerged module of flat sheet membrane
• Toray International U.K. Ltd. (TIUK): trading
• Toray Textiles Europe Ltd. (TTEL): Weaving and dyeing of polyester filament textiles

Copyright (c)2015 Eurotechnology Japan KK All Rights Reserved

Suzuki Volkswagen divorce: Volkswagen makes approx US$ 1.3 billion profit, Suzuki comes out more or less even

by Gerhard Fasol, All Rights Reserved. 18 September 2015, updated: 27 September 2015

A smiling Martin Winterkorn and Osamu Suzuki (79 years old at that time) looking the other way celebrated their freshly agreed “comprehensive partnership” at a press conference in Tokyo on December 9, 2009. Friends of mine who attended this press conference told me later that the lack of communication between Martin Winterkorn and Osamu Suzuki was quite visible to the audience, and that they already then had doubts about the future of this partnership.

Its interesting to look at the faces of Mr Winterkorn and Mr Suzuki in Reuters’ photograph of the occasion – a beaming Mr Winterkorn, and Mr Suzuki looking away from Mr Winterkorn – avoiding Mr Winterkorn’s eyes.

Wall Street Journal reported, that Suzuki and Volkswagen would negotiate details of their “comprehensive partnership” sometime later weeks or months after the announcement. We now know that these negotiations did not lead anywhere, and were never concluded.

Reuters reports that at the press conference VW CEO Martin Winterkorn focused on his plan to overtake Toyota as the global No. 1 carmaker in 2018 or earlier, Suzuki being obviously meant as a step to achieve this target to overtake Toyota and become No. 1 globally. According to Reuters, Volkswagen sold 3.265 million cars in the first half of 2009, and Suzuki sold 1.15 million – if combined, if Suzuki would become Volkswagen’s subsidiary, this would be 4.42 million compared to Toyota’s 3.564 million.

Suzuki Motor Corp. CEO Osamu Suzuki is reported by Reuters to have emphasized that he wanted to clear up any misunderstanding: he definitely did not want Suzuki to become a 12th brand for Volkswagen, and he does not want other people to tell him what to do – in reply to the question if he could see a German CEO for Suzuki Motor Corporation.

Suzuki Volkswagen alliance

Suzuki Volkswagen alliance time line

• 9 Dec 2009: VW-CEO Martin Winterkorn and Suzuki-CEO Osamu Suzuki announced the “comprehensive partnership” at a press conference in Tokyo
• 9 Dec 2009: Suzuki transferred 107,950,000 treasury shares to Volkswagen AG, valued approx at 226,695,000,000 yen (= approx. US$ 2.3 billion)
• Suzuki acquired a 2.5% voting stake in Volkswagen for US$ 1.13 billion
• 15 Jan 2010: VW purchased 19.89% of Suzuki shares for about € 1.7 billion
• 1 July 2011: Osamu Suzuki publicly denounces “Wagen-san’s” intentions in his Japanese language blog in Japan’s Nikkei “スズキとワーゲンの今とこれから （鈴木修氏の経営者ブログ）” (“Suzuki and Wagen now and the way forward”) (may need Nikkei subscription)
• Sept 2011: Suzuki’s Board decides to terminate the partnership
• 18 Nov 2011: Suzuki gives notice to Volkswagen of termination of partnership, Volkswagen does not reply
• 24 Nov 2011: Suzuki files for arbitration at International Court of Arbitration of the International Chamber of Commerce (ICC) in London
• 30 Aug 2015: ICC Arbitration Court issues judgement and holds the termination of the partnership valid, orders VW to sell all Suzuki shares back to Suzuki, and orders Suzuki to pay damages for breaking the agreement
• 17 Sep 2015 8:45am: Suzuki purchases back 119,787,000 of its own shares previously owned by VW back via Tokyo Stock Exchange ToSTNeT-3 system for 460,281,547,500 yen (approx. US$ 3.9 billion)
• 26 Sep 2015: Suzuki announced the transaction to sell all 4,397,000 Volkswagen shares which Suzuki owns to Porsche Automobile Holding SE, completing the termination of the partnership and capital alliance with VW

No common language, colliding expectations and no “meeting of minds”

Much has been reported in the press about what went wrong with the Suzuki-Volkswagen alliance, and both parties obviously have a very different understanding of the development, and both sides will feel obliged to maintain confidentiality. The ICC arbitration is also confidential. Therefore it will be hard to establish the precise facts.

However, it is obvious, that from the start there was no “meeting of minds”.

Expectations were very different and on collision, and obviously were never discussed openly between VW and Suzuki at CEO level. Even if they had wanted to, without any common language any direct communication was impossible anyway between CEOs.

Suzuki apparently hoped to receive technology from Volkswagen, Suzuki is reported to have hoped for personnel support, workers from Volkswagen (?) – it is not clear to this author what Suzuki was planning to give in return. Suzuki apparently gave up on the hope to obtain Diesel engines from Volkswagen and in the end did so from Fiat, which Volkswagen claimed to be an infringement of the cooperation agreement, a view which seems to have been maintained by the ICC arbitrators.

It is obvious, that Volkswagen was aiming to acquire increasing stakes of Suzuki, and was aiming to make Suzuki a subsidiary under Volkswagen control. Volkswagen was particularly interested in Suzuki’s market position in India via Maruti Suzuki India Limited, and by Suzuki’s know-how in designing and producing cost-efficient small sized vehicles. Again its unclear what Volkswagen planned to give in return.

Reportedly, Volkswagen demanded to increase the holding of Suzuki shares to 33% to “facilitate technology transfer”.

In September 2011, Suzuki Motors’ Board of Directors decided to terminate the cooperation with VW, making Suzuki Volkswagen divorce unavoidable.

On 18 Nov 2011 Suzuki gave notice to Volkswagen of termination of the partnership, and asked for return of the Suzuki shares. Volkswagen held on to the Suzuki shares for the time being.

Osamu Suzuki denounces “Wagen-san” intentions publicly in his Japanese blog in Nikkei – the world’s largest business daily.

On 1 July 2011, Suzuki-CEO Osamu Suzuki chose to inform the world in great detail about his opinion and decisions about the relationship between Suzuki and “Wagen” (ワーゲン). This article is entitled “スズキとワーゲンの今とこれから （鈴木修氏の経営者ブログ）” (english translation: “Suzuki and Wagen now and the way forward” (Osamu Suzuki’s management blog)). Osamu Suzuki’s blog can be read here (may need Nikkei subscription).

Clearly, calling Volkswagen “Wagen” and “Wagen-san” already expresses Osamu Suzuki’s frustrations very clearly. We are not sure, but most likely Volkswagen CEO and top management probably read this blog a few days later once it was translated by VW’s Japanese staff.

With this blog article it was unmistakably clear to the world that the Suzuki-“Wagen” cooperation had been broken down without any possibility for repair, and makes the Suzuki Volkswagen divorce public.

Professor Ferdinand Dudenhoeffer, Director of the Center for Automotive Research at the University Duisburg-Essen according to Bloomberg, summarized: “Mr Suzuki didn’t want to be a Volkswagen employee, and that’s understandable”.

VW’s reply: “The tail is not going to wag the dog” (VW-CEO Winterkorn cited in Der Spiegel on 19 Sept 2011)

Germany’s leading intellectual and business weekly Der Spiegel on 19 Sept 2011 quotes VW-CEO Martin Winterkorn about the VW-Suzuki relationship: “Da wackelt der Schwanz nicht mit dem Hund” (the tail is not going to wag the dog).

In the same article Der Spiegel of 19 Sept 2011 states that if Suzuki terminates the cooperation agreement with Suzuki, then VW would be free to increase its ownership in Suzuki even to a majority ownership, and Der Spiegel quotes an unnamed top VW Manager: “Ich schließe diese Möglichkeit nicht aus” (I don’t exclude this possibility).

In the same article, Der Spiegel reports that in an unnamed VW Executive’s opinion, future acquisition of a majority of shares of Suzuki by VW has been agreed since the beginning of the negotiations: clearly exactly the opposite of Suzuki-CEO Osamu Suzuki’s public statements – pointing to a huge misunderstanding between both CEOs.

Suzuki Volkswagen divorce: ICC arbitration results

On 30 August 2015, Suzuki announced details of the arbitration in London and its result in a press notice.

According to Suzuki, Suzuki requested VW to terminate the alliance and the capital relationship, but VW apparently did not respond. Therefore, Suzuki gave notice on 18 Nov 2011 of the termination, and on 24 Nov 2011 Suzuki filed for arbitration with the International Court of Arbitration of the International Chamber of Commerce (ICC). Suzuki asked for termination of the agreement with VW, and to rule that VW should sell all Suzuki shares either directly to Suzuki, or to a third party determined by Suzuki.

One 30 August 2015, the ICC ruled:

• Termination of Suzuki-VW Framework Agreement: Suzuki’s termination notice of 18 Nov 2011 is valid, and the alliance therefore ended on 18 May 2012.
• Divestment of shares in Suzuki: VW must sell all shares of Suzuki either direct to Suzuki or to a third party nominated by Suzuki
• Suzuki’s breaches of agreement: IIC found that Suzuki violated some parts of the Framework Agreement, and that damages to be paid by Suzuki to Volkswagen will be determined later.

Lessons to learn from the Suzuki Volkswagen divorce: communication & respect

• “Comprehensive partnership” without meeting of minds does not work
• Partnerships are hard when CEOs on both sides don’t have any language in common, thus can’t talk to each other
• Hidden agendas destroy trust
• Without trust partnerships don’t work
• Processes and methods (e.g. acquisitions of minor players all over Europe) successful in Europe often don’t work in Japan
• Partnerships without respect both ways don’t work
• Renault and Carlos Ghosn show us how to build a Japanese-European car company alliance, Daimler (with Mitsubishi Motors) and Volkswagen (with Suzuki) show us how it does not work

Suzuki Volkswagen alliance: financial aspects

• Volkswagen reportedly paid Suzuki 222.5 billion yen (= approx. US$ 2.5 billion) for 19.89% of Suzuki’s shares
• Suzuki acquired a 2.5% voting stake in Volkswagen for US$ 1.13 billion

On December 9, 2009, Suzuki transferred 107,950,000 treasury shares to Volkswagen AG, valued approximately at 226,695,000,000 yen (= approx. US$ 2.3 billion)

On June 3, 2010, Suzuki announced the offer of additional shares to be issued by third-party allotment to Volkswagen AG to bring Volkswagen’s share up to 19.89% as follows:

• 3,660,000 newly issued shares
• issue price 1755 yen per share
• total proceeds = 6,423,300,000 yen (= approx. US$ 64 million)

Suzuki announced to use the funds received from Volkswagen as follows:

• 122,484 million yen (= approx. US$ 1.2 billion) for Research and development expenses focusing on environmentally friendly, next generation technology for automobiles
• 100,000 million yen (= approx. US$ 1 billion) Reduction of interest-bearing liabilities to improve financial position (corresponding roughly to the purchase costs of Suzuki’s 2.5% stake in Volkswagen)

Suzuki Volkswagen divorce: financial aspects

On September 17, 2015, Suzuki announced the acquisition of treasury shares in order to acquire the shares in Suzuki held by Volkswagen AG:

• Suzuki acquired 119,787,000 Suzuki common stock shares
• Total amount paid: 460,281,547,500 yen (US$ 3.9 billion)
• Date of acquisition: Sept 17, 2015
• Method: Purchase through ToSTNeT-3 on the Tokyo Stock Exchange at 8:45am Thursday 17 Sept 2015 before regular trading hours

Tokyo Stock Exchange’s ToSTNeT (Tokyo Stock Exchange Trading NeTwork) was launched in 1998, and reestablished on Jan 15, 2008, and the ToSTNeT-3 was established specifically for listed companies to acquire their own shares.

Suzuki has more than 1 Trillion yen (US$ 8.3 billion) in cash, and paid for the share purchase in cash from cash reserves.

Volkswagen had informed Suzuki to have sold 111,610,000 shares corresponding to 19.89% of voting shares, corresponding to approx. 463 billion yen ($3.8 billion).

On September 26, 2015, Suzuki announced the sale of all 4,397,000 Volkswagen voting shares Suzuki owned to Porsche Automobile Holding SE

• Suzuki sold 4,397,000 Volkswagen voting shares to Porsche Automotive Holding SE
• Suzuki did not announce the sales value. At VW’s current (27 Sept 2015) share price of € 115.82, the total sale revenue is expected to be approximately € 509 million (= approx. US$ 570 million)
• Completion of sale: Sept 30, 2015
• Suzuki reports an extraordinary profit of YEN 36.7 billion (= approx US$ 304 million) on this sale.

Ignoring transaction costs, interest, opportunity cost, arbitration and legal fees etc. the balance looks as follows:

• Volkswagen purchased the 19.89% stake in Suzuki for approx. US$ 2.5 billion and sold the same stake for approx. $3.8 billion, i.e. making approx. US$ 1.3 billion profit
• Suzuki sold its 19.89% shares to Volkswagen for approx. US$ 2.5 billion, and now repurchased the same shares for approx. $3.8 billion. In parallel, Suzuki purchased 2.5% of Volkswagen voting shares for approx. US$ 1.13 billion. Thus Suzuki overall, theoretically, made a small loss of approx. US$ 30 million on these transactions plus may have to pay damages to VW for breach of contract to be determined later by ICC.

Purely financially, Volkswagen made approx. US$ 1.3 billion profit on this transaction, while Suzuki came out more or less unchanged except for the damages Suzuki may have to pay to Volkswagen.

Suzuki Motor Corporation (スズキ株式会社) – slogan: “Small Cars for a Big Future”

In FY2014, Suzuki sold 750,000 cars in Japan and 1,170,000 cars in India

Suzuki Motor Corporation (スズキ株式会社) was founded by Michio Suzuki (鈴木道雄) (18 Feb 1887 – 27 Oct 1982) in October 1909 as Suzuki Type Machine Manufacturing Workshops (鈴木式織機製作所) in Hamamatsu, Shizuoka-ken.

On 15 March 1920 Suzuki-type Machine KK (鈴木式織機株式会社) was founded, and renamed to Suzuki Motor Engineering KK (鈴木自動車工業株式会社) in June 1954. In October 1990, the company was renamed to today’s name: Suzuki Motor Co Ltd (スズキ株式会社).

Suzuki’s international business includes:

• Maruti Suzuki India Limited (マルチ・スズキ・インディア)
• Magyar Suzuki Corporation (マジャールスズキ)
• Changan Suzuki (長安スズキ)
• P.T. Suzuki Indomobil Motor (スズキ・インドモービル・モーター)

In FY2014, Suzuki sold:

• 750,000 cars in Japan
• 1,170,000 cars in India
• however, in 2012 decided to end car sales in the USA

Maruti Suzuki India Limited (マルチ・スズキ・インディア) – slogan: “Way of Life!”

Sanjay Gandhi first tried to cooperate with Volkswagen, cooperation attempts with Volkswagen failed, leading to cooperation with Suzuki

Maruti Suzuki India Limited was established in 1981 as Maruti Udyog Limited.

On 16 Nov 1970, the company ‘Maruti technical services private limited’ (MTSPL) was founded by the Indian Government to lay the foundation for an Indian automotive industry, and Sanjay Gandhi was the first CEO.

Sanjay Gandhi contacted Volkswagen AG to seek a cooperation or joint-venture to produce an Indian version of the VW Käfer (Beatle). However, a cooperation with Volkswagen did not work out. The company failed in 1977, and was reborn as Maruti Udyog Ltd by Dr V. Krishnamurthy.

In 1982, Maruti Udyog Ltd and Suzuki entered into a licensing and joint venture agreement, which has developed very well into India’s largest automotive company: today’s Maruti Suzuki India Limited (マルチ・スズキ・インディア).

• publicly traded (BSE: 532500, NSE: MARUTI)
• Market capitalization: 1.33 trillion Indian Rupees (US$ 20.23 billion) (as of Sept 18, 2015)
• Market share in India: approx. 37% (2012) – 45% (2014) of India’s passenger car market (45% for 2014 according to Nikkei Business Online)
• 6900 employees
• Suzuki ownership: increased from 26% to 40% in 1987, increased to 50% in 1992. Currently Suzuki owns 54% of Maruti Suzuki.

Copyright (c) 2015-2023 Eurotechnology Japan KK All Rights Reserved·

Hitachi Rail putting competitive pressure on Europe’s rail established rail manufacturers: Hitachi Rail has “on time delivery” at the top of the list of commitments to customers

by Gerhard Fasol

Winning a series of train contracts, Hitachi Rail invested £82 million (= approx US$ 130 million) in a train manufacturing plant in Newton Wycliffe, Country Durham, UK.

Hitachi Rail Europe announced contracts for the following train carriages to be built in the Newton Aycliffe facility:

• 866 Intercity Express Programme (IEP) Class 800 and Class 801 train carriages for the UK East Coast Main Line (from 2018), and the Great Western Main Line (from 2017) to be maintained for 27.5 years by Agility Trains
• 70 AT200 commuter trains (46 three-car trains and 24 four-car trains) for Abellio‘s ScotRail program

The £ 5.8 billion ($ 10 billion) Intercity Express Programme (IEP) was initiated in 2005 by the UK Department of Transport.

Earlier in 2004, Hitachi received an order for 29 6-car high-speed Class 395 “Javelin” trains (a total of 174 carriages), which went into regular service on 30 December 2009 on the Integrated Kent Franchise, between London St. Pancras Station and Ashford International Station, traveling this approx. 100km distance in 37 minutes, an average speed of 162 km/h.

For a background of the international business aspects of Hitachi, read an essay by the emeritus Chairman of Hitachi Europe, and emeritus Board Member of Hitachi Ltd. Sir Stephen Gomersall.

Hitachi Rail to challenge European rail manufacturers Siemens and Alstom

Europe is one of the world’s biggest rail markets, and has a number of established rail manufacturers including:

• Alstom
• Siemens
• AnsaldoBreda, recently acquired by Hitachi Europe
• Talgo
• Stadler Rail

There has been a series of recent problems in Europe’s established rail industries, which may have contributed to Hitachi’s considerable business success in Europe:

• Failure of the Cisalpino trains operated unsuccessfully between Milan/ Venice and Zurich, which showed many breakdowns and delivered unreliable service, and many resulting complaints.
  See: “A train that fails to arrive“.
• the failed and abandoned Fyra high-speed service between Amsterdam and Brussels using AnsaldoBreda V250 trains, which resulted in an avalanche of legal issues between the Governments, the rail operators, and the train manufacturers.
• Delayed delivery of trains by SIEMENS to Germany’s rail operator Deutsche Bahn, with Deutsche Bahn reported to be “angry” about the delivery delays – note that Hitachi has “one time delivery” at the top of its list of commitments to customers.

Rail in Europe and in Japan are very very different stories

European rail services are predominantly owned, operated and controlled by Government agencies, and to some extent operations are contracted out for limited periods to private service operators, almost none of Europe’s rail services are fully privately owned and operated – a rare and very successful exception is the Jungfraubahn mountain railway.

Rail services in Japan on the other hand are largely owned and operated by a large number of private railways companies, most of which are very successful and profitable and growing and listed on the stock exchange.

Thus Hitachi Rail is used to satisfying the tough needs of very competitive and privately owned commercial rail operators, while Europe’s rail manufacturers to a large extent sell to Government controlled agencies, or directly to Governments, or under Government programs, such as UK’s Intercity Express Programme (IEP).

The Hitachi investment in context: maybe we see a shift in investment value from traditional manufacturing to intellectual business such as insurance and pharmaceutical research

Compare Hitachi’s £82 million (= approx US$ 130 million) with the recent acquisition of UK insurance company Amlin by Mitsui Sumitomo Insurance Company for £2.5 billion (approx. US$ 3.85 billion or ¥642 billion), or the acquisition of Cambridge/UK Heptares Therapeutics Ltd by the Japanese Sosei Group for US$ 400 million (US$ 180 million in cash plus up to US$ 220 million in incentives).

Of course we are comparing apples and oranges here, and the overall Intercity Express Programme (IEP) is on the order of £ 5.8 billion ($ 10 billion), but we may witness here a shift of investment value from traditional manufacturing to intellectual business such as insurance and pharmaceutical research here.

More about Japan’s electronics and electrical machinery industries

Report on Japan’s electronics industry sector (approx. 237 pages, pdf file)

Copyright (c) 2009-2015 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Mitsui Sumitomo Insurance Company acquires Amlin for 2.5 billion pounds (approx. US$ 3.85 billion or ¥642 billion)

On Tuesday, September 8, 2015, Mitsui Sumitomo Insurance Company announced the planned acquisition of London based insurer Amlin plc for 2.5 billion pounds (approx. US$ 3.85 billion or ¥642 billion).

Since Amlin plc is traded on the London Stock Exchange, the acquisition process needs to follow a precisely defined process.

Mitsui Sumitomo Insurance Company offered to acquire 100% of shares (517,658,935 shares), offering 670 pence per common share.

The acquisition is expected to close between January and March 2016.

There has been a string of acquisitions in Europe by Japanese insurance companies, which you can find in our Japan to EU M&A register. Some examples are:

• Nippon Life Insurance partners with AXA Life Insurance earlier in 2015
• Sompo Japan Nipponkoa Holdings Inc to acquire 15% of French reinsurer Scor SE also earlier in 2015
• Japanese insurance SOMPO acquires UK reinsurer Canopius Group Ltd in 2013

In addition, all major Japanese insurers are also active on London’s Lloyds Insurance market, and in other ways in Europe. And these deals are in addition to the acquisition of StanCorp Financial Group by Meiji Yasuda Life Insurance for US$ 5 billion, and HCC Insurance for US$ 7.5 billion by Tokyo Marine.

Mitsui Sumitomo Insurance Company

Mitsui Sumitomo Insurance Company is the company which has announced the planned acquisition of Amlin plc.

Mitsui Sumitomo Insurance Company was founded on October 21, 1918, and has about 14,859 employees on non-consolidate basis.

Mitsui Sumitomo Insurance Company was listed on the Tokyo Stock Exchange (Code: 8725), but was delisted on March 26, 2008, and became a 100% owned subsidiary of MS&AD Insurance Group Holdings KK, which was founded on April 1, 2008, and which assumed the Stock Exchange Code 8725.

Mitsui Sumitomo Insurance Company’s history goes back to 1893, when the Osaka Insurance Company was established.

Mitsui Sumitomo Insurance Group Holdings, Inc.

The Mitsui Sumitomo Insurance Group Holdings, Inc. was founded on April 1, 2008.

On April 1, 2010, The Mitsui Sumitomo Insurance Group Holdings, Inc. was merged with Aioi Insurance and with Nissay Dowa General Insurance Co., Ltd., and the resulting group was renamed: MS&AD Insurance Group Holdings KK.

MS&AD Insurance Group Holdings KK

MS&AD Insurance Group Holdings KK (Tokyo Stock Exchange Code = 8725) was founded on April 1, 2008.

MS&AD Insurance Group Holdings KK companies include:

• Mitsui Sumitomo Insurance Company, Limited . This is the company which is planning now to acquire Amlin plc
• Aioi Nissay Dowa
• Mitsui Direct
• Mitsui Sumitomo Kajou Aioi Life Insurance
• Mitsui Sumitomo Primary

Amlin plc

Amlin plc was founded on September 28, 1998 and has about 1900 employees.

Amlin plc’s business is a global insurer and reinsurer centered on Lloyd’s market in London. Amlin operates the second largest syndicate in Lloyd’s.

Copyright (c) 2009-2015 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

On July 23, 2015 at 15:13 (3:13 pm) British Summer Time, Pearson and Nihon Keizai Shinbun Corporation announced the sale of the Financial Times Newspaper to Nihon Keizai Shinbun Corporation for £ 844 million (approx. US$ 1.3 billion) – sending shock waves around the global news industry.

FT: £ 94 million made the difference.

The Financial Times reported that Germany’s Axel Springer Verlag had offered £ 750 million in cash, but within the last 5 weeks Nihon Keizai Shinbun Corporation (Nikkei) quickly closed the acquisition with a 12% higher cash offer of £ 844 million, while Axel Springer withdrew. So it seems that in the end £ 94 million made the difference.

As a privately held company, Nihon Keizai Shinbun Corporation can act faster, and has far less constraints than the publicly traded Axel Springer Corporation.

Clearly in the best case, this acquisition will help Nikkei Inc to globalize and to bring Japan’s financial news and scoops via Financial Times to Western audiences, and vice-versa, and help both to learn from each other to speed up and expand the transition from paper to new digital business models.

Cultural issues and language issues: for effective cooperation, Financial Times leaders will need to learn Japanese and/or Nihon Keizai Shinbun leaders will need to learn much more English….

Writing news is an intensely intellectual activity. There will be interactions between Nikkei’s almost 100% Japanese reporters and Financial Times’ much more diverse creators. Given that almost zero of Financial Times’s staff speak any Japanese, and that knowledge of English language by Nikkei’s creators and editors is extremely limited, these interactions will be necessarily very limited, and will need intense efforts to expand. As you know, learning Japanese for Western people, and learning English for Japanese people is extremely difficult, especially at the level of writing compelling news to short deadlines and for some of the world’s most clever and demanding audiences – who are always able to defect to a Bloomberg terminal or to a news startup – or from this autumn to Apple-News.

Success of this acquisition is possible and could bring great benefits, but is by no means guaranteed.

Much has been written about editorial independence, separation of content creation vs advertising, and differences in editorial style and aggressive reporting between Financial Times’ aggressive London style vs Nikkei’s more obedient Tokyo style. Surely both can learn from each other!

Note also that the acquisition is subject to “regulatory approval”, and this may well impose conditions on the acquisition.

The context?

Nikkei’s acquisition of Financial Times follows on the heels of a long series of acquisitions in Europe by Japan’s advertising and media giant Dentsu. Given the business relationships between Nikkei and Dentsu, these may also have impact on The Financial Times, allowing The Financial Times to sell more advertising via Dentsu.

Another issues of course is, who did NOT acquire the Financial Times: Bloomberg seems to have not been involved, and Axel Springer seems to have withdrawn.

Nikkei Inc is not Japan’s largest media group – there are several much larger Japanese media groups, including the Yomiuri Shinbun group – the world’s largest newspaper group. Will they follow?

The Economist next?

It has been reported, that Pearson is currently also in the process of selling Pearson’s shares in the iconic Economist Group. Following the Financial Times acquisition by Nikkei which has been conducted low profile, we can expect much more participation in a potential Economist sale.

Pearson only owns 50% of The Economist, the remainder is owned by Families (Cadbury, Rothschild, Schroder, Agnelli and others) and Economist staff and former staff.

The Economist is governed by:

• Trustees:
  • Baroness Bottomley of Nettlestone
  • Lord O’Donnell
  • Tim Clark
  • Bryan Sanderson
• Board of Directors of 12 people

Therefore The Economist’s government structure enables The Economist’s independence, and acquiring Pearson’s 50% will not allow control of The Economist in the way acquiring 100% of Financial Times does.

How big is Nikkei? 6 times larger circulation than Financial Times! Larger than New York Times + Wall Street Journal combined!

Japan’s media sector is very very large, and so is Nihon Keizai Shinbun Corporation.

Nihon Keizai Shinbun Corporation is best known in the west for the NIKKEI index, however this is only a very small part of Nihon Keizai Shinbun Corporation. At the core of Nihon Keizai Shinbun Corporation (Nikkei Inc) is the Nihon Keizai Shinbun (= Japan Economics Newspaper, Nikkei), which appears twice daily, and in terms of circulation is very much larger than New York Times, Wall Street Journal or Financial Times:

Circulation

• Nikkei: 2.77 million (morning) + 1.39 million (evening) + 0.43 million (digital) = 4.59 million
• WSJ: 1.463 million (paper) + 0.734 million (digital) = 2.2 million
• NYT: 0.868 million (paper) + 0.91 million (digital) = 1.8 million
• FT: .225 million (paper) + .504 million (digital) = 0.73 million

Thus, Nikkei’s circulation is larger than WSJ + NYT combined, or more than 6 times larger than Financial Times’.

However, Nikkei is clearly behind in the transition from paper to digital.

Financial Times, 1/4 the size of the Nikkei Corporation in terms of sales

The Financial Times was founded on January 9, 1888.

Financial Times Group sales have increased from around £ 400 million (approx. US$ 620 million) in 2010 to around £ 450 million (approx. US$ 700 million) in FY 2013.

Nihon Keizai Shinbun Corporation (株式会社日本経済新聞社, Nikkei Inc.)

Nihon Keizai Shinbun Corporation (株式会社日本経済新聞社, Nikkei Inc.) was founded on August 11, 1911, but goes back to the newspaper ChuugaiBukkaShinpou (中外物価新報) which started on January 27, 1889, almost exactly one year after the Financial Times was founded.

Nihon Keizai Shinbun Corporation has the Nihon Keizai Shinbun (日本経済新聞) as its core, but owns and operates a very large number of other publishing and media businesses, including also a 31.46% holding in Televi Tokyo Holdings, one of Japan’s major TV based media groups.

• Consolidated revenues: YEN 300.6 billion (US$ 2.4 billion) (FY2014)
• Operating income: YEN 16.7 billion (US$ 0.135 billion) (FY2014)
• Net income: YEN 10.26 billion (US$ 0.08 billion) (FY2014)
• Employees: 7319 (Dec 31, 2014)

You need to understand Japan’s huge media industry sector?

Read our report on Japan’s Media (approx. 200 pages, pdf file)

Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

TOSHIBA sells KONE holding – fall-out from Toshiba’s accounting issues

TOSHIBA sells KONE holding: In the wake of Toshiba’s accounting issues, Toshiba announced the sale of its 24,186,720 shares, corresponding to a 4.6% holding in Finnish elevator company KONE for EURO 864.7 million (YEN 118 billion, US$ 0.95 billion).

Toshiba Elevators and Building Systems Corporation (TELC) and KONE had entered into a mutual capital investment alliance and exchange of Directors in December 2001.

On June 12, 2015 Toshiba announced a restatement of accounts, and announced the installment of an independent 3rd party committee headed by a former Chief Prosecutor of the Tokyo High Court. On July 20, 2015 the independent 3rd party committee announced income corrections with a total value of YEN 151.8 billion (US$ 1.22 billion).

Toshiba Elevator and Building Systems Corporation (TELC)

Toshiba Elevator and Building Systems Corporation (TELC) is a subsidiary of Japan’s Toshiba Corporation, established on February 16, 1967, the first escalator was installed in 1966, and the first elevator in 1967.

Toshiba Elevators produces advanced elevators, such as double decker elevators.

TELC has sales of approx. YEN 120 billion (US$ 1.2 billion) per year, and employs about 4700 people.

KONE

KONE was founded in 1910. KONE’s annual sales are on the order of EURO 7 billion, and KONE employs about 47,000 people. KONE’s shares are listed on NASDAQ OMX Helsinki Exchange.

Japan electronics industries – mono zukuri.

Copyright (c) 2009-2015 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

acquired London based virtual fitting room mannequin venture Fits.me

Rakuten, Japan’s largest e-commerce + e-finance group, is acquiring many companies around the world both to acquire technology, and to acquire e-commerce capabilities outside Japan in order to globalize. Find some of Rakuten’s recent acquisitions in Europe listed here: http://eu-japan.com/?s=rakuten

On July 13, 2015 Rakuten acquired London based virtual fitting room venture fits.me, both to acquire technology and we assume, also to contribute to Rakuten’s globalization.

Fits.me – virtual fitting room, robot mannequins, and fit advisor

Fits.me was founded in 2010 by two Estonian friends, Paul Pällin and Heikki Haldre, in Estonia, and in 2012 the company moved its headquarters to London.

Fits.me helps consumers visualize how they might look like dressed with clothes from an e-commerce site, and turning around, Fits.me allows e-retailers to collect data about their potential customers.

Fits.me offers a number of service versions ranging from “virtual fitting rooms” to “fit advisors”.

Once the customers has entered his/her body dimensions, weight and other data, Fits.me’s web mannequins represent the customer’s body dimensions, and show how selected clothing would look like on a web mannequin with the customer’s body data.

Fits.me received US$ 14.3 million in founding in three rounds:

• Seed: US$ 1.8 million (Sept 22, 2010)
  • Estonian Development Fund
• Series A: US$ 7.2 million (April 17, 2013)
  • Conor Venture Partners
  • Entrepreneurs Fund
  • Fostergate Holdings
  • SmartCap AS
• Venture: US$ 5.3 million (Oct 24, 2014)
  • Entrepreneurs Fund
  • SmartCap AS
  • James B Gambrell
• Total = US$ 14.3 million

Rakuten

Rakuten was founded by Hiroshi Mikitani, and is Japan’s leading e-commerce and e-finance company developing a global footprint through a long series of acquisitions around the globe. Find some of Rakuten’s recent acquisitions in Europe listed here: http://eu-japan.com/?s=rakuten

Copyright (c) 2009-2015 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Recruit expands from classified-type magazine sites into education

On April 1, 2015, Japanese media giant Recruit acquired London based but largely Japanese managed EdTech venture Quipper for US$ 39 million, providing good returns for three investors, Atomico, Benesse and Globis Capital Partners, who had invested a total of US$ 10.1 million over the period 2011-2014.

Quipper represents a new class of global ventures: largely Japanese entrepreneurs and managers founded a venture in London, taking advantage of London’s global business and venture platform, and especially UK’s very strong education infrastructure and education industry, and developing global EdTech business.

Quipper

Quipper is an EdTech venture developing and marketing quiz based e-learning apps platform for smartphones.

Learning content is provided by teachers, experts, publishing houses, teachers and others.

Founded on December 1, 2010 in London (UK).

US$ 10.1 million funding was invested by three investors in three stages:

• Seed, Oct 1, 2011: £ 0.4 million by Atomico
• Series A, May 18, 2012: £ 2.3 million by Globis Capital Partners and Atomico
• Series A, March 6, 2014: $5.8 million by Atomico and Benesse
• Total: US$ 10.1 million

Current Quipper team is predominantly Japanese:

• Masayuki Watanabe (渡辺雅之), CEO
• Masatomo Nakano, CTO
• Takuya Nomma, Marketing Director
• Yosuke Arakaki, Yuta Funase, Joseph Ganderson, Ryan Guerrero, Yusuke Kaneko, Takeyoshi Mizusawa, Satoru Tanabe, Mai Ueno, Annette Tsuda, Business Development

Recruit

Recruit is a Japanese media company with its own original innovative business model. Recruit started with job advertising magazines, and has developed a wide range of advertising platforms for job search, weddings, used cars, and many other areas. Find a description and analysis of Recruit in our Japan Media Report.

Japan’s media markets – research report

Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

“for everything that spins and moves”

by Gerhard Fasol

Nidec acquires German pump manufacturer Geräte- und Pumpenbau GmbH Dr. Eugen Schmidt via the subsidiary Nidec Motors & Actuators (Germany) GmbH (“NMA(G)”) on February 2, 2015.

Geräte- und Pumpenbau GmbH Dr. Eugen Schmidt and subsidiaries have been renamed:

• Germany: NIDEC GPM GmbH
• Brazil: NIDEC GPM do Brasil Automotiva Ltda.
• China: NIDEC GPM Automotive Pumps (Suzhou) Co. Ltd.
• USA: NIDEC GPM North America Corporation

Geräte- und Pumpenbau GmbH Dr. Eugen Schmidt (GPM)

Geräte- und Pumpenbau GmbH Dr. Eugen Schmidt (GPM) develops, manufactures and sells electrical water pumps (EWP), electrical oil pumps (EOP), and modules for passenger cars and commercial vehicles.

Geräte- und Pumpenbau GmbH Dr. Eugen Schmidt has 1002 employees as of December 31, 2014.

NIDEC (日本電産株式会社)>

Founded in 1944 in Kyoto by Nagamori Shigenobu, and produces motors, machinery, optical parts, camera shutters and other electro-mechanical equipment.

Read our report on Japan’s electronics industry sector:

Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

Nidec: “for everything that spins and moves”

Nidec acquired the Italian electrical machinery construction and repair company Motortecnica s.r.l. on May 15, 2015 via its Italian subsidiary Nidec ASI S.p.A. (formerly, Ansaldo Sistemi Industriali S.p.A), which Nidec had acquired in May 2012.

Motortecnica s.r.l.

Motortecnica was established in 1989 in Salerno (Italy) by Antonio Iorio for the repair of electrical machines. Motortecnica has 77 employees and € 11 million in revenues for the fiscal year ending with December 31, 2014.

Motortecnica is focused on:

• planning and production of electric machines such as motors and generators
• construction of electric machine parts: stator coils, rotor coils, connections, whole rotors, whole stators
• machining
• diagnostics and repair of electric machines

Motortecnica moved to new headquarters in September 2013 workshops and factory includes:

• Automatic brazing machine MPM 3000
• CNC Machining units
• Vertical lathes
• Electric furnaces
• Cut and skin
• Impulse generators
• Automatic Meter Zeiss
• Alternating voltage generator 50 kV – 200 kVA
• Ridgway Taping machine
• Stator coil spindle-moulding machine
• Roebel Transposition press
• Instrumentation
• Thermopresse
• Laser cutter
• Waterjet
• Balancing machines maximum 30 tons

Motortecnica invests in equipment, technology and production and maintenance:

• 2008: € 1 million
• 2009: € 2 million
• 2010: € 2.5 million
• 2011: € 1.5 million
• 2012: € 1 million
• 2013: € 2 million
• 2014: € 1.2 million

Nidec ASI S.p.A. (formerly, Ansaldo Sistemi Industriali S.p.A)

Nidec had acquired Ansaldo Sistemi Industriali S.p.A in May 2012, and renamed the company: Nidec ASI S.p.A. Nidec ASI’s business includes:

• large industrial motors
• generators
• low and high voltage drives
• industrial system automation and service with focus on the oil & gas, metals, renewable energy, marine and general industry sectors

nidec (日本電産株式会社)

Nidec was founded in 1944 in Kyoto by Nagamori Shigenobu, and produces motors, machinery, optical parts, camera shutters and other electro-mechanical equipment.

Read our report on Japan’s electronics industry sector to learn more about NIDEC and its place in Japan’s electronics industry sector:

Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

Joyou AG files for bankruptcy

On January 21, 2014, LIXIL had acquired 87.5% of the German bath fixtures company GROHE Group (“Pure Freude am Wasser”).

The GROHE Group owns 72.3% of Joyou AG, thus Joyou AG became a LIXIL subsidiary in January 2014. Joyou AG had an IPO at the Frankfurter Stock Exchange in 2010.

Joyou AG recently filed for bankruptcy, and on June 3, 2015, LIXIL announced a restatement of accounts and projections, reducing income statements.

LIXIL announced income reductions due to the Joyou AG bankruptcy filing:

• FY 2013 (ending March 31, 2014) net income reduced by: YEN 23.8 billion (US$ 191 million)
• FY 2014 (ending March 31, 2015) net income reduced by: YEN 9.4 billion (US$ 76 million)
• FY 2015 (ending March 31, 2016) net income reduced by: YEN 33 billion (US$ 26.5 million)
• Total net income reductions (net losses): YEN 66.2 billion (US$ 532 million)

LIXIL plans to increase international business to half of its sales, and these losses represent a setback for LIXIL’s globalization plans – one of Japan’s new companies striving to overcome Japan’s “Galapagos effect”.

LIXIL

Lixil Corporation (“Link to Good Living”), TSE-Code 5938, manufactures building materials and housing equipment and operates home and home building centers.

LIXIL was formed on April 1, 2011 by the merger of:

• Tostem Corporation
• Inax Corporation
• Shin Nikkei Company, Ltd.
• Toyo Exterior Co., Ltd.
• Sun Wave Corporation

and has been growing aggressively through acquisitions with the target to achieve 50% sales internationally outside Japan. In particular, jointly with the Development Bank of Japan (DBJ) LIXIL acquired a 87.5% stake in the German GROHE Group in 2013, the American Standard Brands (ABS), and the Permasteelisa Group of Italy.

To become global leaders in building materials and housing equipment, LIXIL has recently acquired:

• American Standard Brands (ABS), in August 2013 for US$ 542 million
• American Standard Asia Pacific, in August 2009
• Permasteelisa Group of Italy in 2011
• Shanghai Meite Curtain Wall System in 2011
• LG-TOSTEM, strategic alliance formed in 2010
• Haier-LIXIL, strategic alliance formed in 2011
• jointly with the Development Bank of Japan (DBJ) LIXIL acquired a 87.5% stake in the German GROHE Group in 2013, which includes the Joyou AG

Copyright (c) 2015 Eurotechnology Japan KK All Rights Reserved

Softbank and GungHo jointly acquired 51% in October 2013 for US$ 1.5 billion

by Gerhard Fasol

On June 1, 2015, SoftBank announced an investment to increase the ownership of Supercell stock from 50.5% to 73.2% on a fully diluted basis. This transaction had closed on May 29, 2015.

While Softbank did not officially disclose details of this transaction, VentureBeat/GamesBeat reported that SoftBank this time paid US$ 1.2 billion for this additional 22.7% of ownership. Thus by dividing US$ 1.2 billion by 22.7% we can calculate a market value of US$ 5.3 billion.

Supercell is reported to have achieved revenues of US$ 1.7 billion and income of US$ 0.5 billion in 2014.

SoftBank and GungHo together acquired 51% of Supercell for US$ 1.5 billion in October 2013: SoftBank invested US$ 1.2 billion (80%), while GungHo invested US$ 306 million (20%). GungHo sold its share to SoftBank in August 2014.

Clash of Clans ranked No. 7 top grossing in Japan’s iOS app store

Supercell achieved an important position in Japan’s smartphone game market:

Currently Clash of Clans is ranked No. 7 top grossing app in Japan’s iOS app store, and No. 6 in the Games category (source: Apple App Store ranking).

According to AppAnnie, on June 1, 2015, Supercell’s games Clash of Clans, Hay Day and Boom Beach were ranked as the No. 1 top grossing games for iPad in 149, 128 and 112 countries respectively.

Learn about Japan’s game makers and markets – our report

pdf-file, approx. 398 pages, 141 Figures, 95 Photos, 98 tables, 5 Mbyte

Copyright (c) 2015 Eurotechnology Japan KK All Rights Reserved

Yanmar and Himoinsa to provide solutions for energy markets including cogeneration

On April 27, 2015, diesel engine maker Yanmar and electricity generator maker Himoinsa announced a partnership, including Yanmar to acquire 70% of Himoinsa, to strengthen their solution business for energy markets including cogeneration.

Both Yanmar and Himoinsa are privately held companies, so the amount of information released is quite thin, however we can expect this partnership to help Himoinsa to strengthen business in Asia, where Himoinsa is active since 1999 and currently achieves about 20% of business, while Yanmar will be able to strengthen business particularly in the Hispanic parts of the world.

On the technical and product side, we can expect a range of jointly developed products.

Yanmar has supplied diesel engines for Himoinsa generators since 2006.

Himoinsa – “The Energy”

Himoinsa was founded in 1982, and is based in San Javier, Murcia, Spain.

Himoinsa manufactures and markets products including:

• diesel generators from 3 kiloWatt to 3 MegaWatt
• fas generators from 3 kiloWatt to 3 MegaWatt
• diesel generators from 8 Watt to 3.5 MegaWatt
• lighting towers up to 1.32 Mega-Lumen

Annual revenues are on the order of US$ 300 million:

• 50% of revenues in Europe and Africa
• 30% of revenues in the Americas
• 20% of revenues in Asia Pacific, where Himoinsa started in 1999.

Currently nine production centers, including:

• Headquarters and main factory in Murcia, Spain, including R&D Centre.
• Plant Metal 1, Murcia
• Plant Metal 2, Murcia
• Himoinsa, China in Changzhou (Jiangsu)
• Hipower Systems, Lenexa, Kansas, USA
• Genelec S.A.S, Villefranche sur saone, France.
• Control & Switchgear Himoinsa PVT Ltd, production site at Pantnagar, Uttaranchal, India.
• Brazil
• Argentina

Yanmar Holdings KK (ヤンマーホールディングス株式会社) – “Solutioneering Together”

Yanmar Holdings KK (ヤンマーホールディングス株式会社) is privately held:

• Consolidated revenues: YEN 650.7 billion (US$ 5 billion) FY 2013, ended March 31, 2014
• Consolidated operating income: YEN 44.8 billion (US$ 0.37 billion) FY 2013, ended March 31, 2014
• Group employees: 16,678 as of March 31, 2014

Yamaoka Magokichi (山岡 孫吉, March 22, 1888 – March 8, 1962) founded the company “Yamaoka Engine Manufacturing” (山岡発動機工作所) in March 1912, trading in gas engines. In 1921 the brand/trademark Yanmar (ヤンマー) was created.

In 1920 the company began to produce small oil engines for agricultural applications.

In 1947 the company began to produced small diesel engines for fishing boats, and in 1952, the company name was changed to Yanmar Diesel KK (ヤンマーディーゼル株式会社).

In 2010 the company adopted the slogan “Solutioneering Together”.

On April 1, 2013, the group was restructured under the holding company Yanmar Holdings KK (ヤンマーホールディングス株式会社) .

Yanmar produces mainly diesel engines, and also a range of related products including:

• fishing boats
• hulls for ships
• tractors
• combine harvesters
• rice-planting machines
• gas heat pumps
• snow throwers
• mini excavators
• portable diesel generators
• and other equipment and machinery

Unmanned aerial vehicles – UAV, drones

Since approx. 1995, Yanmar also develops and markets unmanned aerial vehicles (UAV, drones) including:

• Yanmar YH300 SL
• Yanmar AYH-3

Cogeneration

Himoinsa and Yanmar jointly offer a range of cogeneration solutions.

Cogeneration is the joint production of heat and electricity and can save substantial amounts of primary energy compared to the separate production of heat and electricity in separate plants.

Yanmar advertising and branding

ヤン坊マー坊天気予報 (Yanbou and Mabou weather forecast)

In Japan Yanmar became famous for very characteristic and successful advertising.

Yanmar used two mascots (Yanbou and Mabou) for sponsoring weather forecast (ヤン坊マー坊天気予報) on TV between June 1, 1959 and March 31, 2014:

• ヤン坊 (ヤンぼう, Yanbou)
• マー坊 (マーぼう, Mabou)

In July 2013 the official Yanbou Mabou Weatherforecast site was closed – read the official notice here.

You can find this branding explained on Yanmar’s website here.

And you can listen to Yanmar’s famous TV Commercial song here.

And have all your questions answered here.

Look for yourself

Copyright (c) 2015 ·Eurotechnology Japan KK All Rights Reserved

Domino valued at 1.03 billion pounds (US$ 1.5 billion)

97% of today’s printing is analog, however there is a transition now to digital printing. Domino Printing Sciences is specialized on analog printing and now transitioning to digital printing, and needed a financially stronger partner to support increasing R&D costs and to finance expansion into the rapidly growing digital printing markets.

Brother Industries announced its intention to acquire publicly traded Domino Printing Sciences plc following the acquisition process prescribed in the UK for a total of around 1.03 billion pounds.

Domino Printing Sciences plc. “Domino. Do more.”

Domino Printing Sciences plc was founded as a spin-out from Cambridge Consultants in 1978 by Graeme Minto in Cambridge, UK, building on continuous inkjet printing technology (CIJ), and today has about 2300 employees and annual revenues of UKL 350 million (= US$ 526 million).

Domino explains its business in a series of infographics on Pin-it:

• The Domino Process (Pinterest)
• Domino High Performance Ink (Pinterest)
• Colour Digital Label Press N600i (Pinterest)
• Domino: 35 years company history overview (Pinterest)
• Domino’s history can be found here on Domino’s website

Brother Industries (ブラザー工業株式会社)

Brother Industries (ブラザー工業株式会社) was originally founded in 1908 as Yasui Sewing Machine Shoukai (安井ミシン商会) by Kanekichi Yasui (安井兼吉) as a producer of sewing machines. Today’s Chairman Yoshiro Yasui is a descendant of the founder.

On January 15, 1934, Nihon Sewing Machine Production KK (日本ミシン製造株式会社) was established, which was renamed Brother Industries KK (ブラザー工業株式会社) in 1962.

Currently (FY2014) Brother Industries has consolidated annual revenues of YEN 616 Billion (=US$ 5.2 billion), and it’s market capitalization as of April 22, 2015 is YEN 524 billion (US$ 4.4 billion).

Brother Industries is in the following main business areas:

• • Sewing machines
  • Sewing machines
  • Printers
  • Stamp creators
  • Electronic paper
  • Production machines
  • Electronic content distribution system
  • Augmented Reality (AR) systems

For an overview of Japan’s electronics industries see our report “Japan electronics industries: mono zukuri“.

Copyright (c) 2015 Eurotechnology Japan KK All Rights Reserved

To overcome cultural issues of a traditional Japanese leading corporation, Dentsu acquires via London based Dentsu Aegis Network

by Gerhard Fasol

On April 20, 2015 Dentsu announced another investment in its quest to strengthen its global footprint and to strengthen capabilities in mobile and digital: Dentsu acquires Israeli digital performance agency abaGada Internet Ltd..

abaGada Internet Ltd. – performance marketing: “Building your online marketing strategy to deliver outstanding results”

abaGada Internet Ltd. was founded by current CEO, Eval Chen, in May 2010 in Tel Aviv, Israel, and employs about 22 people.

Revenues were about UKL 3.5 million in the year ended December 2014.

abaGada performs search engine marketing (SEM) to increase customers’ website traffic, analysis of customer and user behavior.

Dentsu plans to rebrand and integrate abaGada into Dentsu’s iProspect brand.

abaGada as Dentsu’s technology hub in Israel

Many large global corporations have operations in Israel to link into Israeli’s legendary innovative strengths. Israel’s technology strength and attraction for Japanese corporations was recently visualized at a series of events in Tokyo, e.g. The Israeli Venture Fund meeting in Tokyo on March 4, 2014.

With the acquisition of abaGada, Densu now also has an antenna into Israel’s innovations.

Dentsu and Dentsu-Aegis

Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

Report on Japan’s media landscape (150 pages, pdf file):

Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

Nippon Life Insurance and AXA to jointly offer health insurance product Medi-AxN

Nippon Life Insurance (日本生命保険相互会社) and AXA Life Insurance announced a partnership, and Nippon Life intends to acquire 1% of outstanding shares of AXA Life Insurance to develop a long-term partnership.

Currently AXA’s market capitalization is US$ 62 billion, therefore Nippon Life’s 1% investment in AXA corresponds to about US$ 0.62 billion.

Nippon Life Insurance and AXA are planning to jointly market the health insurance product Medi-AxN (メディ・アン).

Nippon Life Insurance (日本生命保険相互会社)

Nippon Life Insurance (日本生命保険相互会社) was founded on July 4, 1889, is based on Osaka, and has a total of 70,806 employees (of which 18,481 are in-house employees).

Nippon Life Insurance (日本生命保険相互会社) has 113 branch offices, 1562 sales offices and 12,567 distribution partners.

Nippon Life Insurance (日本生命保険相互会社, 日本生命) is a mutual company (相互会社), and not currently traded on any stock exchange.

Annual sales: YEN 7 201 billion (= US$ 60 billion) (FY 2013)
Net income: YEN 248 billion (=US$ 2 billion) (FY 2013)

AXA Life Insurance (アクサ生命保険株式会社, アクサ生命)

The AXA Group is active in 59 countries with about 157,000 employees, with about 100 million customers.

Annual sales: € 92 billion (2014)

AXA is traded on the Paris Euronext exchange.

Copyright (c) 2015 Eurotechnology Japan KK All Rights Reserved

Sompo to acquire 15% of Scor SE for approx. US$ 915 million

On March 6, 2015, Sompo Japan Nipponkoa Holdings Inc (損保ジャパン日本興亜ホールディングス株式会社) announced the investment in the French reinsurer Scor SE, as follows:

• 7.8% (8.1% of voting rights) from largest shareholder, Patinex AG. Patient is a Swiss holding company, owned by Martin and Rosmarie Ebner.
• Sompo plans to increase holding to 15% and send Board Director

Acquisition of 15% share holding corresponds to approx. € 0.83 billion (= US$ 0.9 billion) based on the current market capitalization of SCOR SE.

Sompo Japan Nipponkoa Holdings Inc (損保ジャパン日本興亜ホールディングス株式会社)

Sompo Japan Nipponkoa Holdings Inc (損保ジャパン日本興亜ホールディングス株式会社) was founded in 2010 by the merger of Sompo Japan and Nipponkoa Insurance.

Sompo Japan Nipponkoa Holdings Inc is traded on the Tokyo Stock Exchange (Stock Code 8639), and current market capitalization is approx. YEN 1650 billion (= approx. US$ 14 billion)

In 2013, Sompo acquired UK reinsurer Canopius Group Ltd for UKL 594 million (US$ 972 million).

Scor SE

Scor SE (SE= Societas Europaea) was established in 1970 has a market capitalization of about € 5.55 billion (as of March 5, 2015).

SCOR is listed on Euronext Paris and on SIX Swiss Exchange.

Copyright (c) 2015 Eurotechnology Japan KK All Rights Reserved

Globalization and the art of tea

Hitachi – Japan’s most iconic corporation – under the leadership of Chairman & CEO, Hiroaki Nakanishi embarked on the “Smart Transformation Project” to globalize, to face a world where value creation has moved from manufacturing to innovation and solving customer’s problems, and to overcome long years of stagnation and low profits or losses, despite strong technology capabilities.

One of the most important brains behind Hitachi’s reinvention and globalization is Sir Stephen Gomersall. After a long and successful career as diplomat in the British Foreign Service, culminating in the years as British Ambassador to Japan 1999-2004, Sir Stephen joined Hitachi in 2004 as the first foreigner responsible for proposing and implementing Hitachi’s overseas regional strategy. Later Sir Stephen became responsible for all of Hitachi’s business in Europe as Chairman and Chief Executive of Hitachi Europe, and in addition Sir Stephen also served as Director on the Board of all Hitachi 2011-2014 overseeing all of Hitachi Group’s business as Board Director. With Sir Stephen’s leadership Hitachi achieved major business breakthroughs in Europe.

On March 5, 2015, Sir Stephen gave the “Princess Chichibu Memorial Lecture to the Japan British Society at Ueno Gakuen University in Tokyo with deep insights on Japan-British relations, on comparison of Britain’s and Japan’s position in the world, and on the challenges of globalization facing Japan and Japanese corporations – in particular Hitachi.

Sir Stephen is very clear that there is no alternative to globalization: “Globalisation poses tough challenges for Japanese companies, but is the only way forward”.

Read Sir Stephen’s lecture here:

Sir Stephen Gomersall: “Globalisation and the art of tea” (click the link above to read the full text of Sir Stephen’s Princess Chichibu Memorial Lecture)

Sir Stephen Gomersall

Stephen Gomersall was British Ambassador to Japan from 1999-2004, and Hitachi’s Chief Executive for Europe and subsequently Board Director from 2004-2014. He is now Adviser to the CEO, Hitachi Ltd.

Copyright·©2015 ·Eurotechnology Japan KK·All Rights Reserved·

MixRadio will complement LINE’s local Japanese LINE Music service

by Gerhard Fasol

In December 2014, LINE and Microsoft announced that LINE will acquire the streaming music service MixRadio from Microsoft.

LINE already operates a Japan-only streaming music service “LINE Music”. Since music licensing is largely country or region specific, with this acquisition, LINE can develop global streaming music services building on existing licenses.

MixRadio

The service was developed as “NOKIA comes with Music” by NOKIA in 2007, a streaming music service which was built into certain NOKIA phones. Over the years, NOKIA also used the product names Nokia Music, Nokia Music Store and OVI Music Store for this streaming music service.

With the acquisition of NOKIA’s handset unit by Microsoft, the company became part of Microsoft, and Microsoft changed the name to “MixRadio”.

The company operates currently in 31 countries, and has a catalogue of about 36 million songs using the MP3 file format without Digital Rights Management (DRM) protection.

Competitors are Spotify and others.

Headquarters are in Bristol, UK, current CEO is Jyrki Rosenberg.

LINE Corporation

LINE Corporation is a Japanese/Korean messaging group, which is also the No. 1 top grossing global iOS and Android app provider.

For detailed discussion, see Japan game market report (398 pages, pdf-file):

Copyright 2015 Eurotechnology Japan KK All Rights Reserved

To overcome cultural issues of a traditional Japanese leading corporation, Dentsu acquires via London based Dentsu Aegis Network

by Gerhard Fasol

On March 11, 2015 Dentsu announced another investment in its quest to strengthen its global footprint and to strengthen capabilities in mobile and digital: Dentsu acquires 80% of Greek leading independent digital agency Mindworks, and plans to integrate Mindworks into Dentsu’s Isobar and iProspect networks.

Dentsu has also acquired options to acquire the remaining 20% of Mindworks by 2017.

Mindworks – “the fastest growing digital agency in Greece”

Mindworks was founded in 2003, acquired by Atcom in 2009, and became an independent company again in January 2015.

As a division of Atcom, in the financial year ending December 2014, Mindworks had revenues of EURO 7.3 million. Mindworks has about 60 employees.

Mindworks – to be renamed Isobar-iProspect Advertising Services SA

Mindworks will be renamed Isobar-iProspect Advertising Services SA, and will be integrated into Dentsu’s global Isobar and iProspect brands, representing Isobar’s and iProspect’s entry into Greece’s markets.

Dentsu and Dentsu-Aegis

Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

Report on Japan’s media landscape (150 pages, pdf file):

Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

Retinal imaging market estimated to grow to US$ 530 million in 2019

Currently 70% of Nikon’s business are digital camera, a rapidly shrinking market due to the popularity of smartphone cameras.

Inspired by SONY‘s investment in medical imaging company Olympus, Nikon diversifies from digital cameras into medical imaging, acquiring the Scottish retinal imaging company Optos plc – “The retina company”.

Nikon is reported to have approached Optos plc in December 2014, but seems to have been rejected.

On February 27, 2015, NIKON Corporation and Optos plc jointly announced the agreement for a recommended cash offer my by NIKON for the entire issued and to be issued share capital of Optos. Details can be found on NIKON’s official website for the Optos offer, where NIKON essentially offers a total of UKL 250.48 million (US$ 387 million) for all shares of Optos.

Optos plc – The retina company

Optos plc was founded by Douglas Anderson in 1992 after his son became blind on one eye, because his retina detachment was diagnosed too late.

Optos plc had IPO on the London Stock Exchange in February 2006. Market capitalization on February 27, 2015 was UKL 250.48 million (US$ 387 million), jumping from approx. UKL 191 million (US$ 295 million) on February 26, 2015.

Optos has a market share of about 30% of the global market for retinal imaging. The global market size of devices for retinal imaging is growing and estimated to become US$ 530 million in 2019.

Copyright (c) 2015 Eurotechnology Japan KK All Rights Reserved

e-shelter offers about 90,000 square meters of data center space in 9 locations

NTT Communications is reported by Nikkei to be in negotiations to acquire Frankfurt based e-shelter facility services GmbH for approximately YEN 100 billion (US$ 840 million).

NTT Communications acquisition is driven by the need to grow outside of Japan, and by the need to offer global services.

e-shelter facility services GmbH

e-shelter facility services GmbH was founded in 2000, and offers 90,000 square meters of data center space in 9 locations across Germany, Switzerland and Austria.

e-shelter data centers

• Berlin
• Frankfurt 1
• Frankfurt 2
• Frankfurt 3
• Hamburg
• Muenchen 1
• Muenchen 2
• Wien
• Zuerich

NTT Communications

NTT Communications was created with the privatization of NTT, which is formerly was Japan’s domestic monopoly telecommunications operator (KDD was had the monopoly for overseas telecommunications from Japan).

NTT Communications started globalization with the acquisition of US internet access, hosting and service provider VERIO for a approximately US$ 5.5 billion, announced on May 8, 2000.

Copyright·©2015 ·Eurotechnology Japan KK·All Rights Reserved·

by Gerhard Fasol

Finmeccanica accelerates restructuring, reduces debt and focuses on aerospace, defense and security

Hitachi Ltd (株式会社 日立製作所) and Finmeccanica S.p.A. announced on February 24, 2015, that their Boards of Directors have agreed for Hitachi to:

• acquire the rail business of AnsaldoBreda S.p.A. (with some exceptions) for € 36 million (US$ 41 million), and
• to acquire Finmeccanica’s 40% holding in the rail signaling and rail systems company Ansaldo STS S.p.A. for € 773 million (approx. US$ 880 million)

Hitachi is expected to be required to launch a tender offer for all remaining shares of Ansaldo STS S.p.A. and if successful, will acquire all of Ansaldo STS S.p.A..

Estimating the overall acquisition size:

• AnsaldoBreda S.p.A.: € 36 million (US$ 41 million)
• 40% of Ansaldo STS S.p.A.: € 773 million (US$ 880 million)
• 60% of Ansaldo STS S.p.A.: € 1159.5 million (US$ 1320 million) (in a tender offer)
• Total estimated acquisition cost: € 1968.5 million (US$ 2241 million)

Hitachi and Hitachi Rail

Hitachi is generally considered as one of Japan’s most important and most representative companies. Hitachi was founded in 1910 bei Namihei Odaira, and produced Japan’s first electrical motors. (For a detailed analysis of Hitachi and Japan’s electronics industry, read our report “Japan electronics industries: mono zukuri“.

Hitachi’s “Smart Transformation”

While Hitachi grew into a conglomerate with a large number of different business areas, during the 15 years 1997-2012, Hitachi grew with an annual compound growth rate of only 0.48%, and during the period 1997-2012 suffered average annual net losses of YEN 45 billion (US$ 0.45 billion) per year. This difficult business situation is characteristic of Japan’s electronics industry overall, as discussed in our report “Japan electronics industries: mono zukuri“. One reason for this difficult situation is the so-called “Galapagos Effect“.

Indeed, Hitachi’s “Chief Transformation Officer” (CTrO) explained recently, that it is only in 2011/2012 that Hitachi started to benchmark important business performance data (eg. operating margin, R&D expenditure, administrative expenses, cost of sales etc) internationally. Until 2011/2012 Hitachi had only compared performance data with other Japanese companies such as Toshiba.

In April 2010, Hiroaki Nakanishi was appointed President of Hitachi, and he started the “Hitachi Smart Transformation Project” with the aim to rebuild a strong Hitachi into a truly global company. (You can find an overview of Hitachi’s Smart Transformation Project in our report: “Japan electronics industries: mono zukuri“).

Hitachi has great strengths in rail engineering, and the acquisitions of AnsaldoBreda and Ansaldo STS are an implementation of Hitachi’s Smart Transformation Project.

Other recent acquisitions and investments by Hitachi in the railway engineering field include:

• The Railway Engineering Company (TRE)
• European Rail Research Center (ERRC)

AnsaldoBreda S.p.A.

AnsaldoBreda S.p.A. was formed in 2001 by the merger of the companies Ansaldo Trasporti and Breda Costruzioni Ferroviarie, and employs about 2400 employees.

Gio. Ansaldo & C. was founded in 1853 in Genoa to manufacture steam engines, steam locomotives, rail rolling stock.

Ing. Ernesto Breda and C. was founded in 1886, and became Societa Italiana Ernesto Breda (SIEB) in 1899.

AnsaldoBreda in cooperation with Bombardier produces the Italian high-speed train Frecciarossa, and other trains for many mainly European and US rail operators. Recently there have been a number of delivery problems, e.g. the IC4 for Denmark, and the Dutch/Belgian high speed train Fyra, a project which was abandoned on 31 May 2013 after its operating license was suspended by the authorities.

AnsaldoBreda businesses:

• High speed trains
• Trams
• Driverless metro (e.g. in Taipei, Copenhagen, Salonicci, Riyadh, Milano, Honolulu, Brescia)
• Metro (e.g. Circumvesuviana, Madrid, Fortaleza, Meneghino, Los Angeles, Miami Dade Country, Milano)
• Commuter trains
• Locomotives
• Services

Ansaldo STS S.p.A.

Ansaldo STS S.p.A. is a manufacturer of rail signaling and transportation systems, and was founded in 2006 by the merger of a number of railway engineering companies, including:

• US Union Switch & Signal (US&S), founded by George Westinghouse in 1881 in Pittsburgh, USA.
• Compagnie des Signaux pour Chemins de fer (CSE), founded by Fernand Cumont in 1902, which built the first lines of the Paris Metro. Later renamed Company and Business Electrical Signals (CSEE)

40% of Ansaldo STS S.p.A.‘s shares are owned by Finmeccanica S.p.A. and Finmeccanica has now agreed to sell these 40% of shares to Hitachi. The remaining 60% are traded on the Borsa Italiana, and it is reported that Hitachi will be required to launch an offer to purchase all remaining 60% of shares following the acquisition of 40% from Finmeccanica.

Finmeccanica S.p.A.

Finmeccanica S.p.A. is an Italian industrial group, founded in 1948. As of 23 December 2014, 32.45% of Finmeccanica shares are owned by the Italian Ministry of Economy and Finance.

With the sale of the railway businesses, Finmeccanica will focus on aerospace, defense and security core business.

Japan electronics industries – mono zukuri.

Copyright (c) 2016 Eurotechnology Japan KK All Rights Reserved

Heptares Therapeutics Ltd emerged from the MRC Laboratory of Molecular Biology at the University of Cambridge

Sosei Group Corporation (そーせいグループ株式会社) is a Japanese pharmaceutical group which mainly in-licenses pharmaceutica in Europe and North America, then brings these pharmaceutica to Proof-of-Principle stage in Japan, and consecutively out-licenses these pharmaceutica for further development and marketing.

In 2026, Sosei is expected to lose patent protection for its Seebri inhaler, and to compensate for this expected loss in revenues, Sosei acquired the Cambridge (UK) based Heptares Therapeutics Ltd for up to US$ 400 million (US$ 180 million in cash plus up to US$ 220 million in incentives if certain milestones are reached).

Heptares Therapeutics Ltd

Heptares Therapeutics Ltd creates novel pharmaceutica targeting G protein-coupled receptors (GPCRs) using its StaR drug design technology.

Heptares Therapeutics Ltd started based on the research by Richard Henderson and Christopher Tate a the MRC Laboratory of Molecular Biology at the University of Cambridge (UK).

Heptares Therapeutics Ltd previously was funded by a consortium including MVM International Life Science Capital Management, Clarus Lifescience II LP, Novartis Bioventures Ltd., Takeda Ventures Inc. and the Stanley Family Foundation.

Sosei Group Corporation (そーせいグループ株式会社)

Sosei Group Corporation (そーせいグループ株式会社) was founded on June 22, 1990 with the main purpose to in-license pharmaceutica in the European and North American markets, to develop these pharmaceutica to the point of Proof-of-Principle (POP) in Phase 2a, and then to out-license these pharmaca for further development and marketing in Japan.

Sosei Group Corporation (そーせいグループ株式会社) is listed on the Tokyo Stock Exchange, Mothers Section (TSE 4565).

Sosei Group companies and subsidiaries

• Holding Company: Sosei Group Corporation (そーせいグループ株式会社) (Tokyo and London, UK)
  • Sosei Co. Ltd.(株式会社そーせい) (Tokyo): pharmaceutical development and sales, business development in Japan
  • Sosei R&D Ltd. (London, UK): licensing and business development outside Japan
  • Activus Pharma Co., Ltd.(株式会社アクティバスファーマ) (Chiba, Japan): pharmaceutical development based on nano technology (APNT = Activus Pure Nano-particle Technology)
  • Jitsubo Co., Ltd. (JITSUBO株式会社)（Tokyo): development of peptide drugs, licensing of peptide API manufacturing technology, research related to discovery of peptide drug candidates. Acquired on December 11, 2014. Jitsubo KK was established in April 2005 by Professor Kazuhiro Chiba of the United Graduate School of Agricultural Science, Tokyo University of Agriculture and Technology. Sosei Group acquired 68.7% of voting rights for YEN 421 million (US$ 3.5 million)
  • Sosei CVC Ltd. (そーせいCVC株式会社 / そーせいコーポレートベンチャーキャピタル株式会社) (Tokyo): managing Sosei RMF1 (Regenerative Medicine Fund)

Copyright·©2015 ·Eurotechnology Japan KK·All Rights Reserved·

Rakuten’s first entry into Spain’s markets

On June 13, 2012, Rakuten acquired Spanish online streaming video-on-demand (VOD) provider Wuaki.tv.

Wuaki.tv – slogan: Your online video service

Wuaki.tv was founded 2009 in Barcelona by current CEO Jacinto Roca.

Wuaki.tv is funded by Bonsai Capital, Axon Capital, and Marc Ingla, former Vice-President of the football club “Futbol Club Barcelona”.

Wuaki.tv offers on-demand internet rental streaming video / media based on content distribution agreements with major Hollywood studies, local studies, and partnership agreements with TV and other device manufacturers. Download or storage is currently not supported.

• “rental” is typically for unlimited viewing within a 48 hours rental period
• “buying” typically allows unlimited viewing for a period of 3 years or longer
• “Season Pass” available for some TV series

Wuaki.tv about Wuaki.tv: “We offer the latest Hollywood blockbusters, the most popular TV series, and the best films from independent filmmakers. All this, easily accessible from your computer, Smart TV, tablet, phone and gaming console.” (from the Wuaki.tv website)

Subscribers:

• Spain: 600,000
• Andorra:
• United Kingdom: 400,000 (December 2014), started in July 2013 at an introductory price of UKL 2.99/month (to be raised to UKL 5.99)
• France: (start on September 15, 2014 with a soft-launch for 10,000 users). Rakuten is planning to leverage PriceMinister’s 20 million members
• Total: 1.85 million (December 2014)

Wuaki.tv is reported to enter Italy, Germany and 12 more markets in the near future.

Platforms:

• Android
• Chromecast
• iPad
• PC (with Adobe Flash Player (version 10 or higher) installed)
• Mac (with Adobe Flash Player (version 10 or higher) installed)
• PlayStation 3
• PlayStation 4
• SmartTV (eg. Samsung, LG, Panasonic etc)
• Xbox360, XboxONE
• EETV set top box

Platform usage (December 2014):

• TV: 40%
• Smartphones and tablets: 28%
• PC/Mac web browser: 21%
• Game consoles: 11%
• Total: 100%

Copyright (c) 2012-2015 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Canon offers 50% premium on Axis Aktiebolag share price of Monday Feb 9, 2015

Canon is one of Japan’s most successful electronics groups, with imaging as one of Canon‘s core business areas.

On February 10, 2015, Canon launched a public offer with a total value of about SEK 23.6 billion (US$ 2.8 billion) to acquire all outstanding shares of the Swedish surveillance video company Axis Aktiebolag. The public offer will start on March 3, 2015, and is expected to end on April 1, 2015.

Canon aims for leadership in the global video surveillance market

With this acquisition (if successful), Canon is aiming to become a global leader in the video surveillance market, which is estimated to be about US$ 15 billion globally.

Axis Aktiebolag

Axis is traded on the Nasdaq Stockholm (Large Cap) stock exchange. The trading symbol is AXIS, and the ISIN Code is SE0000672354.

Axis to remain independent entity with current management

Under the applicable Takeover Rules, Axis Board of Directors needs to express an opinion on the impact of the potential takeover on employment, on Canon’s strategic plans, and the impact of these strategic plans on employment and the communities in which Axis does business.

Axis Board of Directors declared Canon’s intention to keep Axis AB as an independent entity under the current management, and continuing the current company culture, and to retain the Axis brand name.

Axis Board of Directors’ statement of February 10, 2015 can be found here on the Axis website.

Japan electronics industries – mono zukuri.

Copyright 2015 Eurotechnology Japan KK All Rights Reserved

Largest global SAP reseller and one of the largest SAP solution providers

On 23 October 2007, NTT DATA, NTT DATA Europe and itelligence AG announced a partnership, and NTT DATA announced to intention of an offer to acquire the shares at € 6.20 per share, about 37.2% higher than the closing price as of 22 October 2007.

On 13 November 2007, NTT DATA Europe published an offer to acquire outstanding shares. This offer ended at midnight on 2 January 2008, and NTT DATA Europe acquired 20,974,169 (= 87%) of outstanding shares, corresponding to an acquisition value of € 130 million, and a total company valuation of € 149.5 million.

On 29 January 2008, NTT DATA sold 2,459,523 shares to NTT Communications Corporation for € 15 million corresponding to € 6.10 per share, leaving NTT DATA with 18,514,646 shares.

On 20 December 2012, NTT DATA Europe announced that it had acquired an additional 3,831,574 shares (= 12.77%) in another tender offer, and an additional 1,317,605 shares (= 4.39%) outside this offer. As a result, NTT DATA holds a total of 29,544,428 shares (= 98.43%). Following this tender offer, NTT DATA proposed a “squeeze out” (aktienrechtlicher Squeeze-out) under the German Stock Corporation Act to acquire the remaining outstanding shares.

On 23 May 2013, the Annual General Meeting of itelligence AG approved the squeeze-out of remaining minority shareholders at a cash compensation of € 10.80 per share.

itelligence AG was delisted from the Stock Exchange in June 2013.

Thus itelligence AG on 23 May 2013 became a 100% owned subsidiary of NTT DATA Europe GmbH & Co KG, but will continue to operate as an independent group within the NTT DATA Group.

NTT DATA Business Solutions

In 2012 itelligence AG added to co-branding NTT DATA Business Solutions

itelligence AG “We make the most of SAP solutions!”

itelligence AG is a SAP solution provider.

Company history:

• 1989 Herbert Vogel and Wolfgang Schmidt founded S&P as a management consulting firm focused on introducing SAP. S&P was one of SAP’s first partner companies.
• 1994 S&P was converted into “SVP GmbH” (Schmidt Vogel & Partner)
• 1999 SVP GmbH was converted into SVC AG (Schmidt Vogel Consulting) and listed in an IPO
• On 7 May 2001, the shareholders of SVC AG Schmidt Vogel Consulting agreed in the merger with APCON AG, forming itelligence AG
• On 23 October 2007, itelligence AG entered into a partnership with NTT DATA
• On 23 May 2013 itelligence AG became a 100% owned subsidiary of NTT DATA and the shares of itelligence AG were delisted

itelligence AG acquisitions

itelligence AG (and therefore NTT DATA via itelligence) has acquired a number of companies in the SAP solutions field:

• 2008: acquires shareholding in SAPCON a.s.
• 2009: ADELANTE SAS: On 19 March 2010 intelligence acquired 51% of ADELANTE SAS.
• 2009: Chelford SAP Solutions: on 6 August 2010, itelligence AG acquired 100% of Chelford SAP Solutions
• 2009: acquires RPF Consulting LLC
• 2009: acquires participation in 2B Interactive
• 2010: 2C Change A/S: on 14 June 2011, itelligence AG acquired 60% of 2C change A/S and an option to acquire the remaining 40%
• 2011: acquired 100% of CONTEMPORARY plc
• 2011: acquired Blueprint Management Systems
• 2012: acquired 60% of interest in Elsys
• 2013: on 1 Nov 2013 acquired 100% of Aster Group
• 2013: itelligence AG acquired the SAP consulting, licensing and maintenance businesses from Software AG
• 2014: on 1 October 2014 acquired Symphony Management Consulting

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Managed Security Services (MSS): Greschitz IT Security and Secode AB join NTT Com Security AG

On June 30, 2009, NTT Communications announced a public tender offer for the shares of Integralis AG offering € 6.75 in cash per share. Integralis at that point was traded on the Frankfurt Stock Exchange (Xetra).

In October NTT Communications acquired 78.4% of Integralis AG at a cost of € 59.1 million, to offer managed security services.

Integralis AG

The company was founded on 19 July 1993 as “Articon Fertigungsleitsysteme GmbH”, Articon Information Systems AG had IPO on the German Neuer Markt in 1998.

Integralis Ltd was founded in 1989.

On 29 February 2000, Articon Fertigungsleitsysteme GmbH and Integralis Ltd merged, and the resulting company was Articon-Integralis AG.

Integralis renamed NTT Com Security AG

On 24 June 2013, Integralis AG was renamed NTT Com Security AG.

NTT Com Security AG

NTT Com Security AG is a listed company, and the company’s shares are traded in the m:access segment of the open market of the Munich Stock Exchange. There are 13,036,844 outstanding shares.

Share holding (according to NTT Com Security AG website):

• 78.30% NTT Communications Corporation
• 2.31% treasury stock
• 19.39% free float

NTT Com Security AG / Integralis acquires Austrian Greschitz IT Security

Thomas Greschitz founded Greschitz IT Security 1995 to focus on internet security, in particular Check Point firewall systems in Graz. 2000 the company moved from Graz to Vienna.

2007 Thomas Greschitz founded the company Greschitz Management GmbH.

2008 Thomas Greschitz sells Greschitz IT Security to Integralis AG.

2010 Thomas Greschitz leaves Greschitz IT Security to focus fully on Greschitz Management GmbH.

NTT Com Security AG acquires Swedish Secode AB

On August 11, 2010, NTT Communications Corporation announced the acquisition of all shares of Secode AB, a managed security services (MSS) provider operating in the Nordic countries. Secode AB’s security operation centers (SOCs) were folded into NTT Communications network of SOCs.

On December 1, 2011, NTT Communications transferred the shareholding in Secode AB to Integralis AG (today’s NTT Com Security AG), making Secode AB a fully owned subsidiary or Integralis AG (Today NTT Com Security AG).

Secode AB become part of NTT Com Security AG.

About NTT and Japan’s telecom markets

Copyright 2014 Eurotechnology Japan KK All Rights Reserved

bringing German mobile know-how to Japan

On September 11, 2009, NTT Docomo announced a voluntary public tender offer for shares of net mobile AG. The tender offer was closed on November 27, 2009, and Docomo Deutschland GmbH acquired 6,126,567 shares at € 6.35 per share corresponding to 79.59% of the company, at a total acquisition cost of € 38.9 million, thus valuing net mobile AG at € 48.9 million.

Acquisition of Bankverein Werther AG to create Net-m Privatbank 1891 AG

On September 22, 2011, NTT Docomo announced the additional investment of up to € 28.4 million (YEN 3.1 billion) in net mobile AG, for the purpose of net mobile AG acquiring Bankverein Werther AG.

The company goes back to the foundation of the financial cooperative “Vorschussverein zu Werther”, which was founded in 1877 in Werther, near Bielefeld in Germany. In 1891, the Vorschussverein zu Werther was transformed into the bank “Bankverein Werther Aktiengesellschaft”. During 2011, Net Mobile AG acquired 93% of shares of Bankverein Werther AG. On December 1, 2011, the traditional banking business, including the trademark “Bankverein Werther” was sold to the regional bank “Volksbank Paderborn-Höxter-Detmold eG“.

With the sale of the traditional banking business and the tradename and brand, the bank reentered the market as Net-m Privatbank 1891 AG. At the end of 2012, Net Mobile AG acquired all remaining shares, so that Net-m Privatbank 1891 AG became a 100% owned subsidiary of net mobile AG.

net mobile AG

net mobile AG was founded on 9 October 2000 in Köln, and headquarters later the same year moved to Düsseldorf (Handelsregister/trade registry No. HRB 48022). In 2001, Net Mobile AG acquired SMS Infowelt. net mobile AG’s business at that time was marking info-SMS, ringing tunes, and other information services for mobile phones.

net mobile AG is a public company, traded at the Frankfurt and München Stock Exchanges (Freiverkehr).

Currently the market cap of net mobile AG is € 77 million (US$ 94 million).

Share ownership (according to the net-mobile website):

• 87,13 % DOCOMO Deutschland GmbH, a 100& subsidiary of NTT Docomo Inc.
• 12,87% traded on the Frankfurt and München stock exchanges

net mobile AG subsidiaries

• net mobile MINICK GmbH (vormals: MINICK Germany GmbH), Hamburg
• first telecom GmbH, Frankfurt a.M.
• first communication GmbH, Frankfurt a.M.
• SN Telecom GmbH, Frankfurt a.M.
• net mobile Verwaltungs AG (vormals: MINICK Holding AG), Zürich/Schweiz
• net-m privatbank 1891
• net mobile Schweiz AG, Zürich/Schweiz
• net mobile Spain SLU, Madrid/Spanien
• GOLDkiwi Media S.L., Diegem/Belgien

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

Idemitsu Kosan (出光興産株式会社) aims for market leadership

On December 20, 2014, both Idemitsu Kosan and Showa Shell separately announced that they had entered into discussions of possible business reorganization, indicating that Idemitsu Kosan may acquire Showa Shell next year. Because Showa Shell Sekiyu KK is a Japanese company traded on the Tokyo Stock Exchange, such an acquisition would be via a tender offer for outstanding shares.

With the development of fuel efficient cars and the shrinking population, refined oil products are a shrinking market in Japan, and a merger between Idemitsu Kosan and Showa Shell is a consequence of consolidation of this shrinking market.

This merger would also mean a departure of Royal Dutch Shell from the Japanese market.

Showa Shell Sekiyu KK (昭和シェル石油株式会社)

Listed on Tokyo Stock Exchange (TKS5002)
Market cap: YEN 384 billion (= US$ 3.2 billion)

Although Showa Shell Sekiyu KK (昭和シェル石油株式会社) generally uses the famous yellow and red Shell logo, Showa Shell Sekiyu KK (昭和シェル石油株式会社) is not a wholly owned subsidiary of Royal Dutch Shell plc, but its a public company traded on the Tokyo Stock Exchange (TSE5002), with a large number of shareholders beyond Royal Dutch Shell plc, which is the largest shareholder with a holding of 35.0%.

Given Royal Dutch Shell plc’s holding of 35.0%, this holding currently is worth approx. YEN 134.4 billion (US$ 1.12 billion).

35% of the reported tender offer price would correspond to YEN 175 billion (US$ 1.44 billion)

Shareholders:

• 35.0% Royal Dutch Shell Plc
• 14.9% Government of Saudi Arabia
• 1.8% Nomura Asset Management Co., Ltd.
• 0.9% Daiwa Asset Management Co. Ltd.
• 0.9% Nikko Asset Management Co., Ltd.
• 0.7% Grantham, Mayo, Van Otterloo & Co. LLC
• 0.7% SEB Investment Management AB
• 0.6% BlackRock Fund Advisors
• 0.6% The Vanguard Group, Inc.
• 0.6% Norges Bank Investment Management
• 42.7% others
• —————————————
• 100.0% Total

related: Solar Frontier KK

Solar Frontier KK is a 100% owned subsidiary of Showa Shell Sekiyu KK, developing and manufacturing copper indium gallium selenide (CIGS) solar cells and related business, such as developing and operating solar power stations using CIGS cells.

Revenues and market shares in Japan’s oil/gasoline markets

With a merger of Idemitsu and Showa-Shell, the combined company will have a firm second position with a 30% market share, very close to the market leader JX Holdings with 34% market share.

• JX Holdings: YEN 12,412 billion (34%)
• Idemitsu: YEN 5,034 billion (14%)
• Showa Shell: YEN 2,953.8 billion (16%)
• Cosmo: YEN 3,537.7 billion (11%)
• Tonen General: YEN 3,241.1 billion (18%)

History of Shell and Showa Shell Sekiyu KK (昭和シェル石油株式会社) in Japan

Showa Shell Sekiyu KK (昭和シェル石油株式会社) is the basis of the Royal Dutch Shell Group in Japan.

Showa Shell Sekiyu KK (昭和シェル石油株式会社) was formed on January 1, 1985 by the merger of Showa Oil Co Ltd and Shell Sekiyu KK. The Royal Dutch Shell Group had a shareholding in Showa Oil Co Ltd since June 1951.

Shell Sekiyu KK goes back to Samuel Samuel & Co, started by Samuel Samuel in partnership with his brother Marcus Samuel, 1st Viscount Bearstead (subsequently The Lord Bearstead and The Rt. Hon. The Viscount Bearsted Bt. – the founder of the Shell Transport and Trading Company), in Yokohama around 1876. Samuel Samuel & Co set up the Rising Sun Petroleum Co Ltd. In 1947, Rising Sun Petroleum Company was renamed Shell Sekiyu.

Shell Sekiyu and Showa Sekiyu merged in 1985 to form Showa Shell Sekiyu.

Copyright·©2014 ·Eurotechnology Japan KK·All Rights Reserved·

Toray management program Project AP-G 2016: “thorough implementation of growth strategy through innovation and aggressive management”

Toray acquires Saati’s European fabric business: Toray announced on 10 December 2014 the agreement to acquire the European carbon fiber fabric and prepreg business of Saati SpA. Toray will take over Saati’s plant located in Legnano (Milano Province) in January 2015, renaming the operations “Composite Materials (Italy) Srl (CIT)” and to become a fully owned subsidiary of Toray.

Saati will continue to own and operate the Saati composite business in America.

Saati SpA

SAATI SpA was founded in 1935 to manufacture silk flour mesh fabrics, and employs about 850 people.

Saadi SpA operates five divisions:

• printing: graphics, electronics, apparel, glass etc
• chemicals: screen printing, emulsions, screen prep and reclaim materials
• filtration
• protection: ballistic panels, helmets etc
• composites: carbon fabrics, glass fabrics, prepreg, UD, etc

Pre-preg

Pre-Preg are pre-impregnated composite fibers with a matrix material such as epoxy.

Toray’s medium term management program “Project AP-G 2016” (from April 2014 to March 2017)

Toray’s Project AP-G 2016 is part of Toray’s long term vision “AP-Growth TORAY 2020“, and follows “Project AP-G 2013.

Thorough implementation of growth strategy through “innovation and aggressive management”.

Key benchmarks for FY 2016:

• Consolidated net sales: YEN 2.3 trillion (US$ 23 billion)
• Consolidated operating income: YEN 180 billion (US$ 1.8 billion)
• ROA 8%
• ROE 10%

Toray’s long term vision “AP-Growth TORAY 2020“: become “a global top company of advanced materials”

AP-Growth TORAY 2020 is a unified growth map for the next 10 years based on Toray’s corporate vision of “contributing to society through the creation of new value with innovative ideas, technologies and products”.

Key KPI’s for AP-Growth TORAY 2020 (to be achieved around 2020)

• consolidated net sales: YEN 3 trillion (US$ 30 billion)
• Consolidated operating income: YEN 300 billion (US$ 3 billion)
• Operating income margin: 10%
• ROA: 10%
• ROE: 13%

Toray Industries, Inc. (東レ株式会社) “Innovation by chemistry” (化学による革新と創造) (TSE 3402, LSE TKK)

Toray Industries, Inc. (東レ株式会社) was founded on 12 January 1926 with an investment by Mitsui Bussan. The company was incorporated as Touyou Rayon (東洋レーヨン) on 16 April 1926.

In 1970 the company name was changed to Toray KK (東レ株式会社). Toray is the abbreviation of Touyou Rayon (東洋レーヨン).

Toray’s main business are:

• fibers and textiles
• plastics and chemicals
• IT related products: films, color filters, products for IC production, graphics materials
• carbon fiber composites
• environment and engineering: water treatment membranes, materials for housing, environmental equipment
• life science
• other: analysis, research related services

Copyright·©2015 ·Eurotechnology Japan KK·All Rights Reserved·

by Gerhard Fasol

Vodafone-Japan: what could the value be today?

Had Vodafone succeeded in Japan, Vodafone-Japan could be worth about US$ 50 billion today, about 1/2 of Vodafone’s total global market-cap today, and combined investment in Japan by European (EU) companies could be about 50% higher than it is today!

With COLT about to acquire KVH, it might seem that this is the only foreign infrastructure based telecom provider left in Japan’s telecom market after a long string of management failures, including Vodafone, Cable & Wireless, Willcom, WorldCom and others.

However, foreign investment in Japan’s telco/cloud infrastructure has not ended, and we believe the next wave including AWS, Microsoft, Google et al may become far more successful than the first wave.

For companies considering investment or business expansion in Japan, it is useful to understand the potential market-capitalization which can be achieved in Japan in case of success, instead of just looking at the sales figures:

• as an example, combined EU investment in Japan is estimated to be approx. € 85 billion (US$ 106 billion) in total,
• had Vodafone succeeded in Japan, total investment in Japan by European (EU) companies would be about 50% higher than it is today.

Why Vodafone-Japan could be worth US$ 50 billion (1/2 of Vodafone’s global market cap) had it been successful

Let us estimate what Vodafone-Japan could be worth today, had it not failed:

Since Vodafone-Japan’s sale to SoftBank on March 17, 2006, Japan’s telecom market has continuously grown, so we can expect today’s valuations to be considerably higher than in 2006. Lets assume that Vodafone-Japan had been successful, and had grown in sync with competitors NTT-Docomo and KDDI, and lets assume that Vodafone-Japan would have been able to continue J-Phone’s innovations to keep subscription figures and financial results in sync with KDDI. In this case, it would not be unreasonable to assume that Vodafone-Japan’s market capitalization today would be KDDI’s minus the value of KDDI’s global data-center business. Thus we arrive at an estimate, that Vodafone-Japan would have a market-cap value on the order of US$ 50 billion today.

US$ 50 billion is about 50% of Vodafone’s total global valuation, and about 50% of the sum of all direct investments in Japan by all European (EU) companies combined.

Thus, had Vodafone been successful in Japan, EU investments in Japan could be about 50% higher than they are today, and Vodafone’s global market cap could be 50% higher as well.

Market capitalization (Dec 2, 2014):

• NTT Group: US$ 61 billion
• NTT-Docomo: US$ 68 billion
• KDDI: US$ 58 billion
• SoftBank: US$ 80 billion
• Vodafone plc (global group): US$ 97 billion
• Vodafone-Japan market cap, had it been successful (our estimate): US$ 50 billion corresponding to approx. 50% of Vodafone’s global market cap)
• total investment in Japan by all European (EU) companies combined: € 85 billion (= US$ 106 billion)
  (see: EU-Japan direct investment register)

Japan telecommunications industry market report

Copyright (c) 2009-2015 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

The acquisition

Both Colt and KVH were founded with investments by Fidelity Investments and associated companies, Colt in London in 1992, and KVH in 1999 in Tokyo, as telecommunications service providers for the financial industry and other industrial customers. While KVH remained 100% owned by Fidelity and associated companies, Colt was listed on the London Stock Exchange in 1996.

Initially founded as telecommunications companies, both Colt and KVH have developed into “information delivery platforms” based on networking infrastructure, data centers, optical fibre networks and associated management and information services.

On November 12, 2014, Colt announced the plan to acquire KVH for YEN 18.595 billion (€ 130.3 million = US$ 160 million) in cash from KVH’s owner Fidelity Investments.

Since KVH is 100% owned by Fidelity Investments, and Colt have also been founded by Fidelity which is still a shareholder, the acquisition needs to be approved by independent Directors and by independent shareholders of Colt.

A General Meeting of Colt’s shareholder has been announced for December 16, 2014 at 10:00am in Luxembourg where the approval of shareholders of Colt will be sought.

Colt – the “information delivery platform”

Colt was founded by James P Hynes (Jim Hynes) with investments from Fidelity Investments and related companies in 1992 in London, and went public with an IPO on London Stock Exchange in 1996.

Colt operates 20 data centers and substantial optical fiber networks, and has more than 5000 employees.

Colt’s annual revenues are € 1,575.8 million (= US$ 2 billion) in 2013.

Colt market capitalization currently is UKL 1.19 billion (= US$ 1.9 billion).

KVH – “Asia’s information delivery platform”

KVH was founded by Fidelity Investments and related companies on April 2, 1999 in Tokyo.

KVH operates 9 Data Centers, owns optical fiber networks in Japan and to major financial centers in the world, and has about 590 employees.

KVH annual revenues are approx. € 133.6 million (= US$ 170 million) in FY2013, i.e. Colt is about 10 times bigger in terms of market cap and sales than KVH.

The planned acquisition values KVH at YEN 18.595 billion (€ 130.3 million = US$ 160 million), i.e. COLT is about 12 times bigger than KVH in terms of market capitalization/value.

Implications of acquisition of KVH by Colt – view as a Japan (and Asia) market entry by Colt

From the point of view of Colt, the acquisition of KVH – which has always been a sister company via the common investor Fidelity Investments, and common founder Jim Hynes – is a relatively low risk market entry into Japan and several other major Asian markets, and promises to have a very high chance of success for all parties.

We need to keep in mind, that essentially all other large scale market entries into Japan by infrastructure based telecommunication operators have failed: Vodafone, Cable & Wireless, WorldCom’s market entries into Japan’s telecom markets have all failed, and to our knowledge KVH is the only remaining internationally owned telecom infrastructure company in Japan today.

You can read a detailed discussion about why Vodafone failed in Japan in our blog here “Vodafone Japan could have been a business worth US$ 50 billion today. Why did Vodafone Japan fail and sell to SoftBank?”.

Essentially, both Vodafone and Cable & Wireless failed in Japan’s telecom markets, because they did not have the multitude of skills and know-how needed to manage a telecommunications business in Japan in a competitive manner. Colt with the acquisition of KVH acquires this know-how, and KVH at the same time has been an internationally managed company from the outset, so that Colt avoids the risks of acquiring a 100% Japanese companies such as Vodafone had done by acquiring Japan Telecom, with all the cultural issues that this entails.

At the same time, we also need to keep the scale in mind. While KVH has a market capitalization (i.e. the purchase price) of US$ 160 million, it can be argued that Vodafone-Japan could be expected to have a capitalization of around US$ 60 billion today had it been successful – i.e. about 375 times larger than KVH.

Japan’s largest telecommunication operator NTT currently has a market capitalization of US$ 62 billion, i.e. about 390 times larger than KVH, while SoftBank’s market capitalization is about 500 times larger than KVH’s.

Thus, if we see Colt’s acquisition of KVH as a market entry into Japan by a European telecom operator, then this is on an approx. 300-400 times smaller scale than Vodafone’s failed market entry into Japan, and with far better circumstances, and a far higher chance of success, and in our view with very carefully controlled risks.

Without doubt, a merger of KVH with Colt was on the minds of Fidelity Investments and Jim Hynes, when they founded both KVH and Colt in the 1990s.

Japan telecommunications industry market report

Copyright 2014 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Hitachi Zosen Inova AG acquires Axpo Kompogas Engineering AG

AXPO agreed on October 24, 2014 to sell its subsidiary Axpo Kompogas Engineering AG to Hitachi Zosen Inova AG (ZHI AG). Closing is in mid December 2014.

Axpo Kompogas Engineering AG (Komeng)

Axpo Kompogas Engineering AG (Komeng) is an EPC (engineering, planning, construction) company planning and constructing dry fermentation plants using the Kompogas process, which produces biogas and compost from biomass via a dry fermentation process.

Address: Flughofstrasse 54, CH-8152 Glattbrugg, Switzerland
CEO: Bernard C. Fenner
Business: EPC (engineering, procurement, construction) and maintenance of Kompogas plants
Established: 2013
Capital: approximately SFR 3.6 million (YEN 425 million)

Kompogas method generates biogas by methane fermentation from kitchen and other organic waste

The Kompogas process was developed about 1988-1989 by the Swiss entrepreneur Walter Schmid initially on his private balcony.

The Kompogas process produces biogas and compost from biological, organic waste via a fermentation process. The resulting biogas can be used for cars and trucks, and the compost as organic fertilizer.

AXPO is an electricity operator, generating, distributing, selling and trading electricity, and is fully owned by cantons of north-eastern Switzerland.

Hitachi Zosen Inova AG (ZHI AG), which became a subsidiary of Japan’s Hitachi Zosen Corporation (日立造船株式会社) with the acquisition of the bankrupt AE&E Inova Holding AG on December 20, 2010, acquires Axpo Kompogas Engineering AG, as of Nov. 5, 2014.

Hitachi Zosen Inova AG (HZI AG) history

Hitachi Zosen Inova AG (HZI AG) was created when Hitachi Zosen acquired AE&E Inova Holding AG on December 20, 2010, after it filed for bankruptcy in Zurich on December 3, 2010, read details here.

AE&E Inova Holding AG goes back to a department for thermal waste management of the Gesellschaft der Ludwig von Roll’schen Eisenwerke which was founded in 1823.

Japan electronics industries – mono zukuri.

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

Standardkessel-Baumgarte: from a classic boiler maker to biomass and waste-to-energy power plants

JFE Engineering acquires all outstanding shares of Standardkessel Power Systems Holding GmbH, for approximately YEN 10 billion (US$ 87 million), from current shareholders.

Standardkessel (founded 1925) and Baumgarte (founded 1935) started as classic boilermakers, and today supply turnkey power plants and power plant components for fossil energy sources, e.g coal, gas and oil, and also for alternative energy carriers, e.g. biomass, municipal waste, and industrial waste.

Standardkessel Power Systems Holding GmbH is a holding company owning 100% of the shares in the Standardkessel Baumgarte Group, which consists of:

• Standardkessel GmbH (founded 1925)
• Baumgarte GmbH (founded 1935)
• Standardkessel Baumgarte Service Holding GmbH (founded 2008)

Standardkessel-Baumgarte were founded as classic boiler makers, and developed into makers of biomass and waste-to-energy power plant suppliers and service group.

By acquiring Standardkessel-Baumgarte, JFE Engineering can strengthen overseas business, accelerate globalization and move into the biomass and waste-to-energy electricity and power generation sector.

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Heraeus Kulzer acquires EGS, expanding both Mitsui Chemicals’ foot print in Europe and global market penetration for Mitsui Chemicals’ dental supplies business

Japanese companies are well known to have substantial difficulties with post merger integration as a consequence of massive cultural differences which need to be overcome for successful acquisitions. One way to mitigate these difficulties is for Japanese companies to acquire a substantial European company, make this acquisition a success, and then acquire additional companies via this first successfully integrated subsidiary. One example for this path is Dentsu with its Aegis acquisition, see: Dentsu acquires Aegis. Subsequently, Aegis acquires a string of companies all over Europe for Dentsu.

Mitsui Chemicals follows a similar strategy by first acquiring Heraeus Kulzer, which then again acquires the CAD/CAM specialist Enhanced Geometry Solutions, EGS Srl.

Enhanced Geometry Solutions, EGS Srl, makes 3D scanners, CAD software, and digital tools for scanning, modeling, designing workflow in dental laboratories.

Copyright (c) 2016-2017 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Panasonic self-driving car technology

As part of the restructuring efforts, Panasonic invests in Spanish car parts maker Ficosa in order to jointly develop Panasonic self-driving car technology.

We have documented in our blogs and reports on Japan’s electronics industry how Japan’s electronics giants lost their global dominating advantages as TVs and other electronics products became commodities, and Japanese electronics makers were blind sided by Apple, Samsung and many other faster innovators. Japanese electronics companies including Panasonic were slow to recognize that their market leading positions were rapidly melting away, and were slow to change.

As part of the restructuring efforts, Panasonic sold several semiconductor fabs to Tower-Jazz, and in a move into car parts, Panasonic invests about US$ 275 million to acquire an approximately 50% stake in the Barcelona based Spanish car parts maker Ficosa International, in order to jointly develop self-driving car technology.

Ficosa had acquired the Sony Barcelona Technology Center

Interestingly, Ficosa had previously in 2010 acquired “SONY Barcelona Tec” SONY Barcelona Technology Center located at Viladecavalls near Barcelona partly alone, and partly in a joint-venture with the infrastructure company Comsa Emte SL.

Japan electronics industries – mono zukuri.

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Nokia to expand market share in Japan, Panasonic to focus on core business

Panasonic, after years of weak financial performance, is focusing on core business. Nikkei reports that Panasonic is planning to sell the base station division, Panasonic System Networks, to Nokia.

Nokia expands No. 1 position in Japan

Our analysis of Japan’s mobile phone base station market shows, that Nokia became No. 1 in Japan’s base station market with the acquisition of Motorola’s base station division. Acquisition of Panasonic System Networks will expand Nokia’s NSN to expand market leadership in Japan’s mobile phone base station market.

Panasonic System Networks

Panasonic System Network’s market share is estimated at around 10% of Japan’s mobile phone base station market, while international sales are essentially non-existent. Thus Panasonic System Network’s global market share is negligible, giving Panasonic little possibility for the scale necessary to operate a stable profitable longterm base station business.

Japan’s mobile phone handset makers and base station makers have for many years focused on serving Japan’s internal market only, and in particular have focused on Japan’s No. 1 mobile phone operators NTT Docomo. This gave Japan’s mobile phone base station makers a temporary home advantage, however with the value shift from hardware to software, they lack scale, and are subsequently uncompetitive globally. More about Japan’s Galapagos effect here.

The context: EU investments in Japan

While Japanese investments in Europe are booming, recently European investments in Japan have been stagnating after Vodafone’s withdrawal from Japan, and there are very few new European investments in Japan. Could it be that Nokia’s investment in Japan starts a new trend of renewed European investments in Japan?

Japan telecommunications industry market report

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Trend: Japanese companies acquire European renewable energy technology companies

On July 2, 2014 Yaskawa Electric Corporation acquired all shares of The Switch Engineering Oy, which are not owned by the Switch. The acquisition price was not announced, however, AMSC in 2011 had agreed and later cancelled to acquire The Switch for US$ 265 million. Therefore we can expect the acquisition price to be at least of this order if not much higher.

Vacon plc held approx. 14% of The Switch directly and another approx. 5% through the investment fund Power Fund I. On July 1, 2014, Vacon plc sold all these shares to Yaskawa Electric Corporation.

Finnish Industry Investment sold a holding of The Switch to Yaskawa.

The Switch Engineering Oy “Bringing you power”

The Switch Engineering Oy makes permanent magnet generators (PMG) and full-power converters (FPC) for wind turbines (1 MW – 8 MW and higher), marine applications and other industrial applications.

The Switch was founded in 1996, and in 2013 reported sales of € 46.2 million (US$ 53 million), and employed 175 people. The Switch headquarters are in Vantaa, Finland.

The Switch Engineering Oy was valued US$ 265 million in 2011

On March 14, 2011, American Superconductor Corporation AMSC signed a definitive agreement to acquire The Switch for US$ 265 million. However, on October 31, 2011, AMSC announced the cancellation of this agreed acquisition and paid € 14.2 million as break-up fee, a sum which had already been paid as an advanced payment of the acquisition price.

Yaskawa Electric Corporation (株式会社　安川電機)

Yaskawa Electric Corporation was founded on July 16, 1915, and headquarters are in Kitakyushu in the West of Japan.

Sales by business segment (FY2014: Fiscal year ended March 2015)

• Motion control: YEN 188.1 billion (US$ 1.571) 47%
• Robotics: YEN 136.0 billion (US$ 1.136 billion) 34%
• System Engineering: YEN 41.0 billion (US$ 0.342 billion) 10%
• Other: YEN 35.1 billion (US$ 0.293 billion) 9%
• Total: YEN 400.153 billion (US$ 3.3 billion) 100%

Copyright·©2014-2015 ·Eurotechnology Japan KK·All Rights Reserved·

by Gerhard Fasol

NuGeneration becomes a joint-venture between Toshiba (60%) and GDF Suez (40%)

In December 2013, Toshiba purchased 50% of NuGeneration Ltd from Iberdrola (of Spain) for UKL 85 million (US$ 146 million).

On June 30, 2014, Toshiba announced to purchase an additional 10% of NuGeneration Ltd from GDF Suez.

Thus, NuGeneration becomes a joint-venture between Toshiba (owning 60% of NuGeneration) and GDF Suez (owning 40% of NuGeneration).

NuGeneration Ltd (NuGen)

NuGeneration Ltd. (NuGen) owns an option to purchase the 190 hectare Moorside site, located to the north of Sellafield, from the UK Nuclear Decommissioning Agency.

NuGeneration plans to build a 3.4 GigaWatt nuclear power station using three AP1000 reactors built by Westinghouse. Westinghouse is owned by Toshiba (87%), by Kazakhstan based Uranium and nuclear fuel producer KazAtomProm (10%) and the Japanese engineering company IHI (3%).

When finished, NuGeneration’s Moorside nuclear power plant is expected to deliver about 7% of UK’s electricity.

Two factors drive Toshiba to acquire a majority holding of NuGeneration (NuGen):

1. the great uncertainty of the future of nuclear power in Japan following the Fukushima nuclear accident
2. Toshiba’s commitment to nuclear power – and dependence on nuclear power construction following the acquisition of the majority of Westinghouse

Japan electronics industries – mono zukuri.

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

CSC Media Group acquisition for UKL 107 million

On June 26, 2014 SONY announced the acquisition of the CSC Media Group of UK for a total of 107 million pounds from the major shareholder Veronis Suhler Stevenson.

CSC Media Group owns and operates 16 satellite and cable channels in the UK.

With this acquisition SONY owns 25 TV channels in Great Britain, and about 64 channels globally.

We believe that with this acquisition SONY aims to strengthen the profitability of content distribution to accompany the restructuring of SONY’s loss making electronics division, which includes the production of TV sets.

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Copyright·©2014 ·Eurotechnology Japan KK·All Rights Reserved·

Milestone Systems A/S is a leading IP based video management software (VMS) and network video recorder (NVR) provider for video surveillance

Milestone System was founded in 1998 to apply IP technology from the financial sector to the surveillance video sector, which had previously been predominantly analogue.

10 July 2008, Index Ventures announced an investment of $27 million (17 million Euros) into Milestone Systems.

IHD estimates that the video surveillance market size is on the order of US$ 13 billion, while Milestone Systems A/S is estimated to have an 8% market share.

Milestone Systems A/S

Milestone Systems A/S

Founded in 1998 by Henrik Friborg and John Blem by applying their knowledge of IP technology for real-time financial systems to digital video surveillance, replacing previously mainly analogue recording techniques.

In June 2014 Milestone Systems A/S was acquired by Canon, reports to Canon Europe, but works as a stand-alone company.

Revenues: DKK 709 million (= US$ 110 million) (2016)
Operating incomee: DKK 121 million (= US$ 19 million) (2016)
Net income: DKK 42 million (= US$ 6.5 million) (2016)
Employees: 600 (2015)

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Following acquisition of Adometry by Google and of Convertro by AOL

On May 28, 2014, Rakuten Marketing announced the acquisition of the Brighton (UK) based marketing attribution specialist DC Storm.

Although terms of the acquisition were not disclosed, Google on May 6, 2014 acquired Adometry for about US$ 150 million, and AOL on the same day acquired Convertro for US$ 101 million. Therefore we assume that Rakuten Marketing probably also paid on the order of US$ 100 million for DC Storm.

Marketing attribution: measuring return (ROI) on marketing investment

Marketing attribution has its origin in the work of Austrian psychologist Fritz Heider‘s work on Attribution Theory, and his seminal work “The Psychology of Interpersonal Relations” of 1958.

Attribution is the process by which people explain the causes for actions, and models for these processes (source: Wikipedia).

Marketing attribution develops understanding of which combination of events leads individuals to take particular actions, e.g. to conclude a purchase for example (source: Wikipedia Attribution (marketing))

Marketing attribution specialist companies have recently been very popular acquisition targets:

• Convertro (about 60 employees) acquired by AOL for US$ 101 million, announced on May 6, 2014
• Adometry (about 130 employees) acquired by Google for an estimated US$ 150 million, announced on May 6, 2014
• DC Storm acquired by Rakuten Marketing, announced on May 28, 2014
• Visual IQ ? (about 190 employees)
• C3 Metrics
• DataSong
• Encore Metrics

DC Storm

DC Storm is headquartered at Brighton, UK, with offices in US and in Germany. DC Storm was founded in 2004 by current CEO, Seth Richardson, who designed and coded the initial versions of DC Storm’s digital marketing analysis platform.

DC Storm offers digital marketing companies attribution tools, analysis and consulting services, and tag management.

Copyright (c) 2014-2015 Eurotechnology Japan KK All Rights Reserved

Horizon 2020 Japan: Ambassador Hans Dietmar Schweisgut, welcome

Horizon 2020 Japan – Yoichiro Matsumoto: Japan’s research needs to go global

(Professor Yoichiro Matsumoto, Executive Vice President, The University of Tokyo)

Recent situation in Japanese Universities

Japan has shown a lower growth in the publication of papers compared to other countries

Quantity: growth rate of number of papers for the period 2009-2011 compared to 1999-2001:

• China: +360% growth
• USA: +28% growth
• Germany: +28% growth
• UK: +21% growth
• France: +28% growth
• Japan: +3% growth
• World: +48% growth

Quality: top 10% of papers during the period 2009-2011 compared to 1999-2001:

• China: +521% growth
• USA: +26% growth
• Germany: +68% growth
• UK: +57% growth
• France: +61% growth
• Japan: +16% growth
• World: +51% growth

Quality: top 1% of papers during the period 2009-2011 compared to 1999-2001:

• China: +692% growth
• USA: +28% growth
• Germany: +99% growth
• UK: +79% growth
• France: +99% growth
• Japan: +39% growth
• World: +51% growth

Budget:

• Japanese Universities have suffered a long term budget cut for ordinary operations lasting more than 10 years
• the ratio of competitive funds have increased rapidly
• we must change ourselves towards strategic thinking and planning for research, its funding and sustainability

The Science and Technology budget in Japan has been increasing rapidly until 2002, but is stagnating since 2002.

Why is international cooperation in research important

scientific output has grown rapidly and collaboration between institutions in different countries has intensified.
International collaboration papers are likely to get more citation impact.

The challenges facing Japanese research institutions – strategic competition and collaboration

• we need strategic competition and collaboration among Japanese research institutions for the management to increase their reputation and visibility globally
• each institution must be more competitive in human and institutional resources, research funds, facilities, student quality, educational performance, global openness, clear vision, efficiency of management…
• unders those severe and open competition, we can make win-win relations among institutions
• we need a long-term and bird-view thinking to enhance the sustainability of research and eduction activities in the institution
• we need global collaboration
• create sustainable environment for research institutions: secure enough domestic funds for research, get international R&D funds like Horizon2020, enhance the mobility of research
• boost international exchanges between European institutions and Japanese institutions
• create network of networks between institutions to discuss our common problems and enhance our activity of research and education

The Royal Society 2011: “collaboration enhances the quality of research, improves its efficiency and effectiveness, and is increasingly necessary as the scale of budgets and research challenges grow”

Horizon 2020 Japan – Anders Karlsson: EU-Japan Science collaboration – a “bird’s eye view” on publication patterns & opportunities for collaboration

(Professor Anders Karlsson, Vice President for Global Academic Relations, Elsevier, Tokyo)

Compound annual growth rate of scientific publications 2009-2013:

• EU28: +4.9% growth
• USA: +4.5% growth
• China: +10.5% growth
• Korea: +9.5% growth
• Japan: +1.1% growth
• world: +4.4% growth

What about the top 10% most cited publications?

• China overtook Japan for all articles: in 2003/2004
• China overtook Japan for top 10% articles: in 2006
• China overtook Japan for top 10% articles in Engineering: in 2003
• China overtook Japan for top 10% articles in Medicine: in 2010

Horizon 2020 Japan – Maria Cristina Russo: Horizon2020 – the chance to go global

(Maria Cristina Russo, Director for International Cooperation, Directorate-General for Research and Innovation, European Commission)

Why go global? Why collaborate internationally?

• all science has become global
• value chains are internationalized: making alliances, sharing costs, accessing markets, agreeing standards
• need to address global society challenges together
• importance for the best EU researchers to cooperate with the best Japanese researchers
• opportunities for Japanese researchers to participate, and to access big projects with important partners from EU and the world by only paying your researchers
• importance of building networks: deep relationships with EU and world actors through R&D collaboration

Why chose the EU to “go global”?
500 million people, 28 countries, a single market = free movement of people + goods + services + capital

• 7% of the world’s population
• 24% of world research expenditure
• 32% of high impact publications
• 32% of patent applications

Some excellent successes:

• 109 “bottom up” participations by 50 different Japan based organizations in 79 FP7 projects
• 5 “top down” jointly designed “coordinated calls” resulting in an additional 17 projects (ICT, aeronautics, energy, critical raw materials)
• successful “support actions”, e.g. CONCERT-JAPAN

Top down coordinated calls:

• top down: joint identification of key priority areas by EU and Japanese authorities
• parallel call procedure, parallel evaluation, separate funding – but joint work and joint results
• worked particularly well in Japan: 5 calls 2011-2013, 17 projects jointly financed, 2 more calls launched or in the pipeline

Unfulfilled potential – participation in EU projects – EU-Japan projects lower than Egypt or Marocco….

1. Russia: 495
2. USA: 476
3. China: 321
4. India: 253
5. South America: 222
6. Brazil: 206
7. Ukraina: 185
8. Canada: 181
9. Australia: 177
10. Mexico: 110
11. Marocco: 110
12. Japan: 109
13. Egypt: 108
14. Argentina: 99
15. Korea: 65

Some key questions:

• why is overall Japanese participation in EU research programs so modest compared with key international partners?
• what can be done to improve participation of Japanese research entities (public and private) in the future?
• what are the bottlenecks and obstacles?
• what are the best approaches? top down? or bottom up?

Horizon2002: a paradigm shift

• Globally the biggest research and innovation funding program: over EURO 80 billion budget over 7 years
• The only part of the EU budget to increase (+30% over the previous program)
• the most open program in the world, international cooperation at its core
• challenge based approach, multi sector activities to address global society challenges
• stressing innovation: from lab to market
• faster, simpler, less red tape

Three ways to participate:

1. General opening: any international partner may participate
2. Targeted opening: in specific topics in calls for proposals including of international partners may be: (a) encouraged, (b) required
3. Coordinated calls: used for specific actions, paired calls, linked evaluations, two separate contracts

How to get involved?

1. find a relevant call
2. find partners
3. submit a proposal
4. get involved!

Horizon 2020 Japan – Kazushi Watanabe: Experience of international collaboration. FP7 project: Surface heat exchangers for aero-engines

(Kazushi Watanabe, General Manager, Business Development, Sumitomo Precision Products, Aerospace & Defense)

EU-Japan collaboration project: Advanced Structural Surface Cooler (ASSC), a component for turbines.

EU funded the research at INEGI (Instituto de Engenharia Mecanica Gestao), Rolls-Royce, GKN Aerospace Sweden AB, SICOMP (Swerea Sicomp AB)
METI funded research at Sumitomo Precision Products (SPP), and SPP subcontracted part of the research to the University of Tokyo

In addition there is a Research agreement between Rolls-Royce and SPP

One attraction of this research project for SPP is that there are not many turbine manufacturers in Japan, and this research project opened new markets for SPP products.

Naoto Kobayashi: FP7 project and internationalization of research at Waseda University

(Naoto Kobayashi, Center for Research Strategy, Waseda University)

FP7 projects at Waseda University:

• Capsil Project (April 1, 2008 – March 31, 2010)
  • International support of a common awareness and knowledge platform for studying and enabling living
  • Professor Shuji Hashimoto (Faculty of Science and Engineering), 理工学術院　橋本周司教授
  • Total budget: EURO 587,150
• RoboSoM Project (December 1, 2009 – May 31, 2013)
  • A Robotic Sense of Movement
  • Professor Atsuo Takanishi (Faculty of Science and Engineering), 理工学術院　高西淳夫教授
  • Total budget: EURO 1,659,000
• GR:EEN Project (March 1, 2011 – February 28, 2015)
  • Global Re-ordering: Evolution through European Networks
  • Professor Shujiro Urata (Faculty of International Research and Education), 国際学術院　浦田秀次郎教授
  • Total budget: EURO 7,944,718

Yoichi Iida, Japan-EU cooperation in civil aeronautics industry

(Yoichi Iida, Director, Aerospace and Defense Industry Division, Manufacturing Industries Bureau, METI)

Agreement between the Government of Japan and the European Community on Cooperation in Science and Technology.

2012-2013:
1st Working Group
SUNJET, concluded in October 2012
Call 5 Projects: SHEFAE, JEDI ACE and HIKARI to concluded early 2016

March 2014: 2nd working group: discussion on next cooperation projects

from 2015:
Working Group
NEXT Projects (Horizon2020)
Future Projects (support action)

Lessons learnt from FP7:

• Complicated framework of agreements: IP treatment between Japanese companies and European Commission, dispute settlement process
• different timing of budgets

For Horizon2020 the structure of cooperation projects will be:

1. Grant agreement between the Japanese Government and Japanese participants
2. Grant agreement between the European Commission and European participants
3. Coordination agreement between Japanese participants and European participants

Horizon 2020 Japan – Satoru Ohtake: closing remarks

(Satoru Ohtake, Senior Executive Director, Science and Technology Agency)

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by Gerhard Fasol

Hitachi Engineering Europe: the new name for Valcom

Hitachi acquired all outstanding shares of Valcom S.r.l. and will rename the company “Hitachi Engineering Europe S.r.l.”

Valcom S.r.l. is an Engineering, Procurement, Construction (EPC) company, headquartered in Milano (Italy), in the following fields:

• Oil and gas field development, electrical and instrumentation engineering business for oil and gas plant systems
• Fossil fuel and nuclear power plants
• Pipelines
• Refineries and petrochemical facilities
• Chemical and service industries
• Airport and communications networks
• Power transmission lines
• Renewable energy power plants
• Non-residential buildings (hospitals, universities, offices, etc.)
• Floating Production, Storage and Offloading (“FPSO”) systems
• Engineering business related to electrical equipment (transformer substation, power distribution, drive systems, and lighting equipment, etc.) needed to operate machinery, and measurement equipment (sensors, etc.) and to control plant systems

Japan electronics industries – mono zukuri.

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

Lesmobilizers SAS to be integrated into Dentsu’s Isobar

by Gerhard Fasol

On March 4, 2014 Dentsu announced further European investments in its quest to strengthen its global footprint: Dentsu acquires French mobile marketing agency Lesmobilizers SAS.

Lesmobilizers SAS – Mobile Applications Creators

Lesmobilizers SAS are a dedicated agency in design and development of mobile applications. The company was founded in March 2010 in Paris, France, and employees about 10 people.

In the year ending December 2012, gross profits were about EURO 0.8 million.

Dentsu and Dentsu-Aegis

Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

Report on Japan’s media landscape (150 pages, pdf file):

Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

Initially, London Stock Exchange and Tokyo Stock Exchange created Tokyo AIM as a joint-venture company in order to create a jointly owned and jointly managed Tokyo AIM, modeled according to the very successful London AIM model.

Nikkei: “Tokyo Stock Exchange has learnt enough from the London Stock Exchange to set up a similar market on its own”

However, on March 26, 2012 NIKKEI reported that “Tokyo Stock Exchange has learnt enough from the London Stock Exchange to set up a similar market on its own. TSE plans to improve the rules of its own new market, so that TSE can create a more welcoming market” (our translation of the original Japanese NIKKEI article to English).

London Stock Exchange withdrew from the venture, and Tokyo Stock Exchange took over 100% of Tokyo AIM. Essentially, London Stock Exchange AIM’s venture into Japan failed, while the stock market created by the venture continues without London Stock Exchange’s involvement. As explained in our blog here, these events are very very similar to what happened with NASDAQ about 10 years earlier!

Tokyo AIM is renamed TOKYO PRO Market and TOKYO PRO BOND Market

In 2012, the name was changed from Tokyo AIM, to TOKYO PRO Market and TOKYO PRO BOND Market. Details can be found here:

• TOKYO PRO Market
• TOKYO PRO BOND Market

Some background about the mistakes which led to the failure of both NASDAQ and London Stock Exchange AIM to build business in Japan can be found here:

• Tokyo AIM stock market rebirth under TSE alone? – Will Tokyo-AIM go the same way as NASDAQ-Japan?

Copyright·©2014 ·Eurotechnology Japan KK·All Rights Reserved·

explido to be integrated by Dentsu into iProspect brand

by Gerhard Fasol

On February 28, 2014 Dentsu announced further European investments in its quest to strengthen its global footprint: Dentsu acquires German performance and search agency explido and integrates explido into Dentsu’s iProspect business and brand.

explido GmbH & Co KG – Agentur für digitales Marketing und Vertrieb

explido GmbH & Co KG offers digital marketing services, was founded in October 2002 in Augsburg, Germany, and employs about 135 people.

explido achieved about EURO 11.7 million gross profits annually.

Dentsu and Dentsu-Aegis

Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

Report on Japan’s media markets (150 pages, pdf file):

Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

LIXIL acquires 87.5% of German GROHE Group (“Pure Freude an Wasser”), valuing GROHE at € 3.06 billion

Lixil Corporation follows the strategy to become the global leader in building materials and housing equipment, and on January 21, 2014, together with the Development Bank of Japan, acquired 87.5% of the German GROHE Group. The shares were acquired from Glacier Luxembourg One Sarl, which is indirectly owned by TPG Capital (formerly Texas Pacific Group) and DLJ Merchant Banking Partners (“DLJ MBP”), an affiliate of Credit Suisse and traces its roots to Donaldson, Lufkin & Jenrette.

The acquisition deal structure is quite complex. Voting rights are split 50%/50% between Lixil and Development Bank of Japan (DBJ), Lixil uses YEN 160 billion of non-recourse loans. Lixil has a call option on DBJ share ownership, allowing Lixil to acquire all of Grohe.

• Lixil’s advisors:
  • Financial advisors: SMBC Nikko Securities, BNP Paribas, Development Bank of Japan (DBJ), Moelis
  • Legal advisors: Linklaters, Mori Hamada & Matsumoto, Nagashima Ohno & Tsunematsu
• Grohe’s advisors:
  • Financial advisors: Acxit Capital Management, Goldman Sachs, Credit Suisse, Morgan Stanley
  • Legal advisors: Clifford Chance, Nishimura & Asahi, Weil Gotshal & Manges

Lixil Corporation

Lixil Corporation (“Link to Good Living”), TSE-Code 5938, manufactures building materials and housing equipment and operates home and home building centers. To become global leaders in these fields, LIXIL has recently acquired:

• American Standard, in August 2013 for US$ 542 million
• American Standard Asia Pacific, in August 2009
• Permasteelisa Group, in 2011
• Shanghai Meite Curtain Wall System in 2011
• LG-TOSTEM, strategic alliance formed in 2010
• Haier-LIXIL, strategic alliance formed in 2011

LIXIL was formed on April 1, 2011 by the merger of:

• Tostem Corporation
• Inax Corporation
• Shin Nikkei Company, Ltd.
• Toyo Exterior Co., Ltd.
• Sun Wave Corporation

and has been growing aggressively through acquisitions with the target to achieve 50% sales internationally outside Japan.

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Socializer joins Isobar

On January 20, 2014 Dentsu announced further European investments in its quest to strengthen its global footprint: Dentsu acquires Poland’s social media agency Socializer

Socializer SA

Socializer SA was founded in Warsaw, Poland, in March 2011, earned gross profits of UKL 1.7 million in the financial year ended December 2012, and employs about 130 people.

Socializer provider advertising and communications services using Social Media (SNS).

Dentsu and Dentsu-Aegis

Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

Report on Japan’s media landscape (150 pages, pdf file):

Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

NuGeneration acquires 50% stake in NuGeneration from Spain’s Iberdola

In December 2013, Toshiba purchased 50% of NuGeneration Ltd from Iberdrola (of Spain) for UKL 85 million (US$ 146 million), making NuGeneration a 50%/50% joint venture between Toshiba and GDF Suez.

NuGeneration Ltd (NuGen)

NuGeneration Ltd. (NuGen) owns an option to purchase the 190 hectare Moorside site, located to the north of Sellafield, from the UK Nuclear Decommissioning Agency.

NuGeneration plans to build a 3.4 GigaWatt nuclear power station using three AP1000 reactors built by Westinghouse. Westinghouse is owned by Toshiba (87%), by Kazakhstan based Uranium and nuclear fuel producer KazAtomProm (10%) and the Japanese engineering company IHI (3%).

When finished, NuGeneration’s Moorside nuclear power plant is expected to deliver about 7% of UK’s electricity.

Two factors drive Toshiba to acquire a 50% share of NuGeneration (NuGen):

1. the great uncertainty of the future of nuclear power in Japan following the Fukushima nuclear accident
2. Toshiba’s commitment to nuclear power – and dependence on nuclear power construction following the acquisition of the majority of Westinghouse

Japanese investments in UK nuclear power generation

Toshiba’s investment in NuGeneration is the second large Japanese investment in UK nuclear power generation, following Hitachi’s acquisition of Horizon Nuclear Power from Germany’s RWE and EON Ag.

While Germany has decided to exit nuclear power with the “Energiewende”, the future of nuclear power in Japan is unclear – unlike in Germany, at the moment all Japanese nuclear power stations are switched off.

Interestingly Japanese and German companies react in opposite ways regarding the future of nuclear energy: German companies RWE and EON AG exit nuclear energy, while Toshiba and Hitachi grasp the opportunities and acquire nuclear power planning companies NuGen and Horizon Nuclear Power.

Japan electronics industries – mono zukuri.

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

In order to globalize, Japanese insurance company Sompo Japan (株式会社損害保険ジャパン), part of the insurance group NKSJ Holdings (NKSJホールディングス株式会社, TSE / JPX: No. 8630) announced yesterday the acquisition of 100% of the UK re-insurer Canopius Group Limited, operating on Lloyd’s for UKL 594 million (US$ 972 million), from the current owners. Current majority owner of Canopius is Bregal Capital.

Canopius will keep the brand, company name, and management team.

Canopius: one of the top ten insurers on the Lloyd’s market

Canopius, is an insurance group, one of the top ten insurers in the Lloyd’s market, was founded in December 2003, almost exactly ten years ago, via a Management Buy-Out (MBO) with UKL 25 million capital, which grew about twenty-fold to about UKL 500 million today, and today has about 560 employees.

Canopius is named after Nathaniel Canopius, native of Crete, who studied at Balliol College, Oxford, apparently introduced coffee drinking to Oxford around 1637 (according to the Canopius website), and later became Archbishop of Smyrna (Source: “Anglicans and Orthodox, Unity and Subversion, 1559-1725”, by Judith Pinnington, 2003, ISBN 0-85244-577-6, page 15).

Sources: press announcements by the companies, websites.

Japan to EU investment trend

While European investments in Japan are steady, Japanese corporations are investing heavily in Europe, approximately EURO 10 billion per year, in order to globalize and to expand their global foot print, and to acquire new know-how, which is clearly both the case here.

Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

Japan is traditionally stronger in the expert of manufactured goods, while EU is stronger in the export of commercial services. Combining both merchandise and services, the trade between EU and Japan is now balanced.

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M&A and direct investment (FDI) transactions:

• Japan to Europe M&A
• Europe to Japan M&A

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EU Japan investment: EU to Japan

EU to Japan investment register

EU investments in Japan have been relatively constant around EURO 80 billion. There has been a marked reduction in EU investment in Japan in 2006 due to the withdrawal of Vodafone from Japan with the sale of Vodafone KK to Softbank for approx. EURO 12 billion (find details of the Vodafone-SoftBank M&A transaction here). This reduction of EU investment stock in Japan is clearly visible in the graphics below in 2006 and 2007.

EU Japan investment: Japan to EU

Japan to EU investment register

Japanese investments in EU are steadily increasing, as Japanese companies are seeking to grow business outside Japan’s saturated market, and as Japanese companies acquire European companies for market access, technology and global business footprint. In 2012 the total investment stock of Japanese companies in the EU-27 has reached around EURO 150 billion.

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Supercell investment leverages paradigm shift, time shift and market disconnects

Smartphones and the “freemium” business models are bringing a dual paradigm shift to games and create a new truly global market. To take advantage of this global paradigm shift, its necessary to overcome the cultural disconnects between markets. SoftBank and GungHo‘s investment in the Finnish smartphone/tablet game maker Supercell, announced on Oct. 15, will help to overcome the disconnect between Japan’s and other game markets for both Supercell and GungHo.

The disconnect between Japan and other countries is often surprising – when BusinessWeek in 2006 commented on rumors that SoftBank might introduce an Apple “iPod-Phone” to Japan, BusinessWeek remarked that “Apple would normally never talk to a small-fry such as SoftBank” …. at that time SoftBank’s annual revenues were about twice Apple’s, and BusinessWeek printed my correction pointing out that SoftBank even at that time was anything but a “small fry”.

One of SoftBank‘s aspects is it’s “time-shift” investment model, another is SoftBank‘s 30/300 year vision – both are important factors to understand the Supercell investment.

This Figure contrasts the market caps of new mobile and smartphone centric game companies (GungHo, Supercell, DeNA and GREE) with traditional console, video game and arcade game companies.

SoftBank announced that because of the majority investment, Supercell will become a subsidiary of SoftBank, and GungHo will account for Supercell’s profit/loss under the equity method.

GungHo and Supercell both are top-ranking mobile game companies: GungHo inside Japan with “Puzzle and Dragons”, and Supercell outside Japan with “Hay Day” and “Clash of Clans”. Expect both to leverage each other’s resources.

Both GungHo and Supercell show explosive growth:

GungHo’s operating profits increased 4050% (x 40) for Jan-June 2013 compared to the same period one year earlier.
Supercell’s revenues (mainly in-game purchases) jumped 500x from EURO 151,000 in 2011 to EURO 78 million in 2012.

Culture can be an issue between Japan and other countries, however, SoftBank has invested in more than 1000 comparable companies, and many of SoftBank’s investments have been outstandingly successful including Alibaba and Yahoo.

However, investment and management support by SoftBank does not automatically guarantee success in Japan – despite SoftBank’s investment and support, Zynga closed operations in Japan earlier this year. Success in Japan will remain Supercell’s responsibility, despite SoftBank’s and GungHo’s help and investment – as Zynga can tell.

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Otsuka buys Astex in a tender offer for US$ 886 million

Otsuka buys Astex Pharmaceuticals (formally Astex Therapeutics, UK). Astex Therapeutics is a oncology drug discovery company based in Cambridge, England, and at the time of acquisition was listed on NASDAQ (ASTX).

The acquisition was done through a tender offer at an offer price of US$ 8.50 per share, a 48% premium on the stock price, starting on 13 September 2013, and completed on 10 October 2013, followed by a merger on 11 October 2013.

Total acquisition capital was US$ 886 million.

Astex Therapeutics

Astex Therapeutics is a oncology drug discovery company, based on a proprietary fragment based “drug discovery platform” Pyramid.

Astex Therapeutics was founded in 1999 in Cambridge, England, by

• Sir Tom Blundell http://www.bioc.cam.ac.uk/people/uto/blundell, http://structure.bioc.cam.ac.uk/groups/blundell
• Chris Abell
• Harren Dhoti

On 7 April 2011, Astex was acquired by SuperGen (NASDAQ:SUPG). The surviving company was Astex (NASDAQ:ASTX). This acquisition closed on July 2011.

Astex business model based on up-front technology access fees, success fees for milestones and product royalties to fund internal R&D

Astex Therapeutics has developed a business model where revenues offset cash burn. Fee income provides funding for Astex R&D: Astex does not work on a fee-for-service basis, but achieves substantial upfront cash technology access fees, and agrees on success fees based on achieved development milestones, and royalties on product sales.

Examples of major agreements under this business model:

• 6 December 2005: Novartis, upfront access fee and + deferred equity payments of US$ 25 million, potential of up to US$ 520 in fees. World-wide license for cell-cycle inhibitor AT9311, option to license cell cycle inhibitor AT7519
• 2008: Janssen, US$ 37 million upfront access fee and equity and initial research funding
• 2009: GSK, US$ 33 million upfront fee and equity

Otsuka Pharmaceutical Co., Ltd. (大塚製薬株式会社)

Otsuka Pharmaceutical Co., Ltd. (大塚製薬株式会社) is a Japanese pharmaceutical company, founded on 10 August 1964, traded on the Tokyo Stock Exchange (TYO:4578).

Copyright (c) 2017 Eurotechnology Japan KK All Rights Reserved

Dentsu further expands the global footprint in Spain

On September 20, 2013 Dentsu announced further European investments this year in its quest to strengthen its global footprint:

• acquisition of 51% of Ymedia SL via Aegis Media Iberia, full 100% acquisition expected by 2019
• acquisition of 31.8% of Wink TTD SL via Aegis Media Iberia, full 100% acquisition expected by 2019

Ymedia SL

Ymedia SL is a full-service media agency, founded in December 2006 and based in Madrid, Spain, employing about 50 people.
Gross profits in the year ending Dec 2012 were about UKL 8.8 million.

Wink TTD SL – “Transforming through Digital”

Wink TTD SL: a communication agency for digital transformation.

Gabriel Saenz de Buruaga (former worldwide CEO for Havas Digital) and Alejandro Esteves (former Managing Director of Aegis Media, Spain) founded Wink TTD SL in November 2011 in Madrid, Spain, employing about 40 people.
Gross profits in the year ending Dec 2012 were about UKL 5.1 million.

Wink TTD SL has the following six founding principles:

1. Fast fish eat slow fish
2. Sector exclusivity
3. Best talent in the market
4. Senior talent dedication to clients
5. We charge for what we do

Dentsu and Dentsu-Aegis

Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

Report on Japan’s media landscape (150 pages, pdf file):

Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

On August 27, 2013 NTT Docomo announced the planned acquisition of the Austrian company fine trade gmbh, which offers payment solutions to e-commerce and m-commerce companies.

The acquisition price has been reported to be “several tens of millions of EUROs”. Docomo acquired

• 75% of shares in fine trade gmbh from Three Little Birds AG, and
• 25% of shares in fine trade gmbh from Schneider Holding Wirtschaftsprüfungsgesellschaft mbH

via Docomo’s German subsidiary DOCOMO Deutschland GmbH (DDL).

fine trade gmbh

fine trade gmbh was founded in 2011.

fine trade gmbh’s business model

fine trade gmbh offers online merchants over 180 different payment options, billing and collection services, including deferred payments against invoice.

fine trade manages credit risks and evaluates shopping data.

Loviit

Loviit is a payment solution provider, taking care of all payment processing and credit management for online retailers. Loviit enables e-commerce and m-commerce providers to offer a full range of payment options.

NTT Docomo’s growing finance and payment platform business in Europe

Through the acquisitions of:

• Net-Mobile,
• Net-Mobile Privatbank,
• Buongiorno and
• fine trade gmbh,

Docomo is continuing to build a platform for finance and payments in Europe and elsewhere.

NTT Docomo offers this payment and finance platform as a B2B service to mobile operators, content and service providers and e-commerce and m-commerce markets.

Copyright (c) 2015 Eurotechnology Japan KK All Rights Reserved

Collaboration-as-a-Service (CaaS)

On August 5, 2013, NTT Communications (NTT Com) announced that it will acquire 91.2% of the shares of the French conference and collaboration specialist Arkadin International SAS from current investors AXA Private Equity (now: Ardian Investment) and other investors.

The valuation is estimated at approximately US$ 463 million.

After the sale of 91.2% to NTT Communications, ownership will be as follows:

• 91.2% NTT Communications
• 8.8% management

Arkadin International SAS [enjoy sharing] – Collaboration-as-a-Service (CaaS)

Arkadin International SAS is one of the world’s largest providers of audio, web, video conferencing and unified communications services.

The company was founded in 2001 by Olivier de Puymorin, and today serves about 37,000 customers in 32 countries.

NTT Communications Corporation (エヌ・ティ・ティ・コミュニケーションズ株式会社)

NTT Communications Corporation (エヌ・ティ・ティ・コミュニケーションズ株式会社) is a fully owned subsidiary of NTT Corporation, Japan’s incumbent telecommunications group.

NTT Communications offers a wide range of data services, data centers, global communications services both in Japan and globally. Main data are:

• 8000 employees
• revenues: 981 billion yen (US$ 8 billion)

For a comprehensive analysis of Japan’s telecom industry sector see our Report on Japan’s telecommunications industry.

Copyright·©2013-2015 ·Eurotechnology Japan KK·All Rights Reserved·

Dentsu further expands the global footprint in Europe

Social, content and digital marketing empowerment based in Italy

On July 30, 2013 Dentsu announced another European investment this year in its quest to strengthen its global footprint: the acquisition of a 70% majority share in the Italian
Simple Agency via Aegis Media Italia, a of subsidiary Dentsu Aegis Network Ltd.

Simple Agency srl – “Digital Marketing Empowerment”

Simple Agency srl was founded in April 2008 in Milan, Italy, by Marco Caradonna, and employs about 30 people.

Simple Agency has two parts:

• Simple Agency: digital marketing empowerment
• Simple Advisory: social and content marketing empowerment

Dentsu and Dentsu-Aegis

Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

Japan’s media sector – research report

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How much broadband (ADSL, xDSL and FTTH) is installed in Japan? Find the answer and detailed statistics and market shares in our report on Japan’s telecom industry.

Similarly, Japan was far in advance of other countries in laying the foundations for the mobile internet, with the introduction of the DoPa (DoCoMo Packet) packet switched network on March 28, 1997, several years before packet switched networks were introduced in EU and elsewhere. However, Japan’s electronics and telecoms industries largely failed to capture global value from this pioneering work. Essentially only Softbank with the SPRINT acquisition now has hope to capture such global value.

A very interesting point is that in EU there are many discussions and uncertainties how broadband fiber investments can be profitable. Japan has solved this problem: FTTH business in Japan is profitable. We see arbitraging opportunities in capturing value from Japan’s know-how, similar to Softbank’s “time shift” investments, arbitraging the time shift of internet roll-out in US vs Japan vs China, as explained in our Softbank-report.

Japan has 30% more FTTH fiber broadband subscriptions than EU + Switzerland + Norway + Iceland…

Several years ago the EU engaged our company Eurotechnology Japan KK to benchmark EU vs Japan in fixed and wireless broadband. Our summary was that broadband connections are the lifeblood of our information society, and that Japan was far ahead of EU in providing and using both fixed and wireless broadband, and broad band fiber connections were much faster and cheaper in Japan than in EU. Although both have progressed since our benchmarking work for the EU, Japan is still very far ahead of EU in terms of fast fiber broadband penetration.

However, provision of broadband fiber connections is only one side of the coin. The other side of the coin is capturing value and creating wealth for the society. The really important point is, whether Japan’s electronics, telecoms, content and service industries can capture global value from the advanced deployment of broadband infrastructure. As we discussed in detail in the “Post-Galapagos working group”, Japan is being held back by the “Galapagos effect” – and the trick will be to make the necessary changes to break out from this trap.
Read detailed analysis in our Japan-Telecommunications-Industry Report

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Content & community management, brand engagement, social media, SNS advertising based in The Netherlands

by Gerhard Fasol

On May 23, 2013 Dentsu announced another European acquisition within the single month of May 2013 in its quest to strengthen its global footprint: the acquisition of the leading Dutch social media agency Social Embassy BV via its European subsidiary Dentsu Aegis Network Ltd.

Social Embassy BV

Social Embassy BV is The Netherlands’ largest social media agency, based in Amsterdam. The company was founded in 2008 by Steven Jongeneel and co-founder Niels van der Velden, and focuses on strategy & insights, content & community management, creative, brand engagement and advertising.

The company employed about 30 people when Dentsu acquired it.

Dentsu and Dentsu-Aegis

Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

Report on Japan’s media landscape (150 pages, pdf file):

Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

Renamed Kinecto Isobar

On May 14, 2013 Dentsu announced the acquisition of the Romanian digital advertising agency Kinecto via its subsidiary Dentsu-Aegis, based in London. Following the acquisition, the company was renamed Kinecto Isobar.

Kinecto

Kinecto International SRL is one of the most important digital advertising agencies in Romania, and was founded in 2002 by Dr Radu Ionesco and has about 10 employees.

The company focuses on online and social media campaigns, CRM programs, creative and production services for websites and micro websites, email marketing and search engine marketing

Before acquisition by Dentsu-Aegis, the company was part of the Tempo Creative Group.

Dentsu and Dentsu-Aegis

Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.

A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.

Report on Japan’s media landscape (150 pages, pdf file):

Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

Panasonic Automotive acquires AUPEO! to stream music into internet connected cars

Japan’s electronics giants are under immense pressure to refocus away from commodities. Panasonic Automotive now acquires the German company AUPEO!, specialized on streaming music into internet connected cars.

Aupeo was founded in Berlin’s startup scene in 2008 by Armin Schmidt and CEO Holger Weiss, and focuses on streaming music into internet connected cars.

AUPEO! works both B2B with car manufacturers and aftermarket car audio producers and also B2C offering services to consumers.

AUPEO! currently works with the following OEMs

• BMW
• Mercedes
• Mini
• Honda
• Toyota
• Ford
• Audi

and in the aftermarket with:

• Pioneer
• JVC Kenwood

More information here on corporate.aupeo.com/about-us/

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

Mitsui Chemicals [4183] acquires Heraeus Kulzer GmbH to combine with Sun Medical Co Ltd to form a global dental materials business

At the Board Meeting of April 4, 2013 Mitsui Chemicals Inc decided to acquire the dental business of Heraeus Holding GmbH (Heraeus Dental).

Mitsui Chemicals and Heraeus Holding GmbH agreed to a valuation of € 450 million (YEN 54.3 billion) including debt, and to be adjusted to changes in working capital and cash on the closing date.

Mitsui Chemicals’ subsidiary Sun Medical Co Ltd has been producing dental materials for 30 years, and plans to combine Heraeus Dental with Sun Medical Co Ltd to form a combined global dental materials business.

Heraeus decided to divest Heraeus Dental, mentioning that the dental industry is changing and the use of precious materials for dental restoration is declining.

Heraeus Holding GmbH (Seller)

Heraeus is a family owned privately held company, with core focus on precious metals.

Heraeus was founded in 1851 by the pharmacist and chemist Wilhelm Carl Heraeus, who had inherited his father’s pharmacy “Einhorn Apotheke” in Hanau, near Frankfurt. Wilhelm Carl Heraeus invented a method to melt platinum using a oxyhydrogen blowpipe. In 1857, Wilhelm Carl Heraeus produced about 30 kilograms of pure platinum, and about 1 ton in 1896.

Heraeus Holding GmbH achieves € 3.4 billion in product revenues + € 12.2 billion in precious metal trading revenues, a total of € 15.589 billion revenues annually in 2014 with about 12,600 employees.

Heraeus Kulzer, Heraeus Dental and Heraeus Medical

Heraeus since the 1930 supplies dental materials based on the gold, silver and palladium alloy Alba, and a variety of gold and ceramic bonding alloys. In 2009, Heraeus Kulzer was split into Heraeus Dental and Heraeus Medical.

Heraeus Dental (Trade name) / Heraeus Kulzer GmbH (Corporate group)

Heraeus Kulzer consists of 17 corporate entities (share deal) and 9 entities (asset deal), a total of 26 legal entities.

Net assets: € 57.5 million (as of Dec 31, 2012)
Gross assets: € 165.3 million (as of Dec 31, 2012)

Revenues: € 353.6 million (year ending Dec 2012)
Operating income: € 16.2 million (year ending Dec 2012)

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EU-Japan Gateway program keynote

I was invited to give a keynote talk to about 50 European participants in the EU-Japan Gateway program, which assists small and medium sized European companies to enter the Japanese market.

Japan energy market: “How can a European company succeed in Japan’s energy landscape?”

I explained Japan’s energy situation today, based on our reports:
Renewable energy in Japan
Japan’s energy sector

followed by some advice on how a European company can succeed in Japan, covering the following points:

• you often need a taylor made solution for Japan
• you need to understand the market, market landscape, need to do your market research
• you need to understand the value of your product/service in Japan’s market
• you need working capital to build business in Japan, somebody needs to invest this working capital: you, your investors, or in some cases Japanese partners, each option has advantages and disadvantages
• some common mistakes – why business development in Japan can fail
• some steps towards success

Hitachi Consulting aims to grow to US$ 1.5 billion annual revenues by FY2015

by Gerhard Fasol

Hitachi Consulting announced on January 2, 2013 the acquisition of the UK based operations management consulting firm Celerant Consulting.

Caledonia Investments announced the sale of its 47.3% ownership in Celerant Consulting for around 47.7 million pounds (US$ 68 million). Therefore we estimate that the full acquisition price of 100% of Celerant Consulting is around 92 million British Pounds (US$ 145 million).

Celerant Consulting

Celerant Consulting was founded in 1987 as Cambridge Management Consulting Limited by Ian P. Clarkson, and changed the name to Celerant Consulting Limited in May 2001. Headquarters are in Richmond (UK) and since December 31, 2012, Celerant Consulting Limited is a subsidiary of Hitachi Consulting Corporation.

Caledonia Investments invested in Celerant Consulting in May 2006, backing an MBO from Novell Inc.

Hitachi Consulting and Hitachi

Hitachi Consulting is part of the Hitachi Information & Telecommunications System Company (ITSC).

Hitachi is Japan’s largest electronics and electrical industry group. After about 17 years of stagnation, very low growth and very small profits, Hitachi was shell-shocked by approx. US$ 8 billion losses in FY2009 to embark on “Hitachi’s Smart Transformation”. Acquisition of Celerant Consulting is in line with Hitachi’s Smart Transformation, which includes a shift to profitable services and globalization.

Japan electronics industries – mono zukuri.

Copyright (c) 2015 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Hitachi Europe expands European Traffic Managment Railways (TMS) sector

Hitachi Europe, on December 20, 2012 announced the acquisition of The Railway Engineering Company (TRE) from James Fisher and Sons plc for UKL 25.5 million.

The Railway Engineering Company (TRE) products include:

• Automatic Routing Systems
• Signalling and Interlocking Simulation
• Data Preparation tools
• Signalling System support
• TREsim, a high fidelity simulator and TREsa
• Signallers Automatic Route Setting (SARS)
• Signallers Assistant Control System (SACS)

Japan electronics industries – mono zukuri.

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

Rakuten’s 6th acquisition in Europe

Rakuten is aggressively globalizing in the face of intense competition by Amazon.com, and more recently Alibaba. As part of global growth, Rakuten is acquiring a string of e-commerce, e-book, online media, and software and service companies in Europe. Now Rakuten has started to build fulfillment logistics infrastructure in Europe to strengthen the backend of e-commerce.

On November 6, 2012, Rakuten announced the acquisition of logistics specialist Alpha Direct Services (ADS), based in Beauvais (France), from the previous owners:

• Adrian Diaconu, founder and CEO
• French investment fund FCDE, regarding ADS, see here.

Note that in 2013, Rakuten acquired the US-based logistics company Webgistix, continuing the strategy to build a global logistics network.

Alpha Direct Services (ADS)

Alpha Direct Services (ADS) was founded in 2002 by Adrian Diaconu based on the acquisition of the French book club enterprise “Grand Livre du Mois”, with annual sales of € 3.5 million (US$ 4 million).

ADS offers a global value chain:

• front-end websites
• order management
• receipt of products
• storage, warehousing
• order picking
• fulfillment delivery, shipping (BtoB and BtoC)
• reverse logistics
• customer relationship management (CRM)

Adrian Deacon developed Alpha Direct Services (ADS) into a mail order, e-commerce and multi-channel logistics company.

Alpha Direct Services (ADS):

• 490 employees
• storage surfaces: total 130,000 square meters
• inventory: 2 million products
• 24 million packages shipped/year
• 180 active clients

Alpha Direct Services (ADS) growth:

• 2007: acquired Evreux logistical unit
• 2013: acquired Moissy-Cramayel logistical unit
• 2014: 13,000 square meter extension of Beauvais logistical unit

Copyright (c) 2012-2015 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

E.ON and RWE to withdraw, Chinese consortium lost bid

In tune with Germany’s “Energiewende”, E.ON and RWE npower decided to sell Horizon Nuclear Power.

On October 29, 2012 Hitachi Ltd (株式会社日立製作所) announced the agreement to acquire Horizon Nuclear Power for £696 million (approx. US$ 1 billion), and the purchase was completed on November 26, 2012.

One of the bidders was a joint venture between China Guangdong Nuclear Power Group and China National Nuclear Corporation, however dropped out of the competition.

Engineering, Procurement and Construction (EPC) will reportedly be undertaken by a joint venture of Hitachi Ltd (株式会社日立製作所), Babcock, Rolls-Royce, and SNC-Lavalin Group.

UK is planning to invest £110 billion to replace existing nuclear power stations with modern designs.

Horizon Nuclear Power

Horizon Nuclear Power was founded in 2009 as a joint venture between E.ON and RWE npower with the plan to build a nuclear power station with 6 GigaWatt capacity on a site close to the Oldbury and Wylfa nuclear power stations.

Wylfa nuclear power station is located near Wylfa Newydd (Isle of Anglesey) and can be found here on Google-Maps.

Oldbury nuclear power station is located about 23 miles from Bristol (UK), Oldbury (South Gloucestershire, on the banks of the Severn Estuary), and can be found here on Google-Maps.

Horizon Nuclear Power plans:

• Wylfa Newydd (Isle of Anglesey): two Advanced Boiling Water Reactors (WBWRs) planned delivering 2.7 GigaWatt
• Oldbury (South Gloucestershire): 2.7 GigaWatt planned

Hitachi Ltd (株式会社日立製作所)

Hitachi Ltd (株式会社日立製作所) aims to grow its nuclear business to YEN 360 billion/year (approx US$ 3 billion) by 2021.

Japan electronics industries – mono zukuri.

Copyright (c) 2012-2015 Eurotechnology Japan KK All Rights Reserved

Rakuten acquired e-reader manufacturer Kobo

Rakuten acquired 100% of e-reader manufacturer Kobo for US$ 315 million in cash in January 2012.

Kobo announced the acquisition of French digital publishing company Aquafadas on October 10, 2012.

Aquafadas

http://www.aquafadas.com was founded in Montpeller in 2004 by Matthieu Kopp (CTO) and Claudia Zimmer (CEO). Today headquarters are located in the Montpellier International Business Incubator’s (MIBI).

“Aquafadas” is the combination of “Aqua”, the name for Apple OSX’ graphical user interface and “fada”, which is the goddess of inspiration (Muse) in Occitan (the original language used in the Provence).

Tools include:

• InDesign Authoring: publishing customer mobile apps for iOS and Android using Adobe InDesign
• Cloud Authoring: conversion of print to interactive mobile apps, e-books and web applications
• CreativeFlow: creating of digital magazine apps
• ConversionFlow: importing print documents to smartphones, tablets and web
• Aquafadas Viewer
• AppFactory
• ComicComposer
• Cloud Connect
• App Marketing Tools
• SDK Packages

Desktop apps include:

• MotionComposer
• BannerZest
• PulpMotion
• KidsMotion
• SnapFlow
• iDive
• Videopier

Copyright (c) 2012-2015 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

ERCC will be part of Hitachi Europe’s Transportation Energy & Environment Research Laboratory

Hitachi “inspire the next” announced on October 10, 2012 the opening of the new European Rail Research Centre (ERRC) in London, to support Hitachi’s many rail projects in Europe and globally.

Hitachi’s new European Rail Research Centre (ERRC) will conduct research into:

• rolling stock design
• manufacturing
• maintenance
• traffic management systems

Hitachi Rail Europe recent orders

• UK Department for Transport’s Intercity Express Programme (IEP): 225 km/h Super Express Trains (SETs) to be financed, supplied and maintained by Agility Trains. Total number of trains: 122 trains
• UK Network Rail Infrastructure Limited (“Network Rail”): prototype Traffic Management System

Japan electronics industries – mono zukuri.

Copyright (c) 2012 Eurotechnology Japan KK All Rights Reserved

Buongiorno SpA becomes fully owned subsidiary of NTT Docomo

NTT Docomo acquired mobile content provider Buongiorno SpA in August 2012 following a public tender offer via Docomo’s German subsidiary DOCOMO Deutschland GmbH. The shares were delisted from the Italian Stock Exchange on August 22, 2012.

Buongiorno SpA

Buongiorno Chairman Mauro Del Rio in 1995 sent email messages with the subject line “Buongiorno” (= good morning) to 11 friends with daily jokes, in 1998 Mauro Del Rio’s newsletters went to 25,000 people, creating the base for the company.

As of December 31, 2006, Buongiorno SpA had consolidated investments of € 157.2 million, and consolidated revenues of € 191.8 million, and consolidated net income of € 12.6 million, and approx. 659 employees.

Buongiorno SpA has grown through a series of acquisitions:

• MyAlert in 2001
• merger with Vitaminic in July 2003
• Gsmbox in 2004
• Freever (founded by Jerome Trainel, Philippe Tissot, and Pierre Duhau-Laurent) in 2005
• Tutch NL in 2005
• Dioranews in 2005
• Inventa in 2006
• Rocket Mobile in 2007
• HotSMS
• FlyTXT
• iTouch in 2007
• eDong Asia
• Glamoo
• Dada.net in 2011
• carve out B2B business into Lumata Group

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

Tokyo (mobile SUICA, FeliCa) vs. London (OYSTER, Mifare)

Mobile payments are big: Reuters estimates that the mobile payment market will be about US$ 1000 Billion by 2016, and in Japan just a single railway line achieves already now several US$ billion in mobile payments per year.

Mobile payment in London:

On July 17, 2012 The Wall Street Journal reports, that as far as Transport for London is concerned, there is no viable mobile payment solution at this time:

• Transport for London sees no way to use mobile payments at ticket barriers at this time, because the technology is not advanced enough
• London’s state-of the art mobile payment transactions take longer than 500 milli-seconds which is too slow for Transport for London requirements

Mobile payment in Tokyo:

While no viable solution has yet been found in London, in Tokyo millions of people use “mobile SUICA” mobile payments every day at Tokyo’s rail, subway, tram lines and buses:

• mobile payments at ticket barriers were first demonstrated in Tokyo in 2003 (photo below shows a demonstration at a trade show in Tokyo in 2004)
• “mobile SUICA” mobile payments were commercially introduced to the public since January 28, 2006
• payment transactions take 100 milli-seconds or less, which would fulfill Transport for London’s speed requirements
• in addition mobile SUICA also has a full e-money function, and can be used at 1000s of stores all over Japan for payments, and for 1000s km of high-speed trains all over the main island of Japan, between Hakata and Aomori.

Why does it take at least ten years to reinvent the mobile payment wheel in London?

Why is it that a problem the solution of which was demonstrated in Tokyo in 2003 and put to commercial use every day since January 28, 2006 without any problems, has not yet been solved in London even today?

The answer to this question is of course complex, and you will find elements of a discussion of this question on pages 185-188 of our mobile payment report (click here for free download which includes pages 185 – 188, pdf-file).

In our opinion the answer for this huge delay even today in the age of globalization and internet is a combination of:

• human nature and
• the huge communication gap and disconnect between European organizations and companies and Japanese organizations and companies and
• the totally different way in which banking systems, payment systems, and also the commercial structure and way of thinking of transportation companies are organized regulated in EU vs Japan.

We have been working on mobile payment and e-money issues here in Tokyo for about 10 years or longer, and you may be interested in some of our reports:

• Mobile payment report
• SUICA and mobile near field payments for transport report
• Mobile payments and e-money for vending machines report
• Mobile payment report collection

Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

by Gerhard Fasol

Dentsu’s challenge to grow global footprint while managing cultural differences

On Thursday, July 5th, 2012, Dentsu announced the acquisition of Aegis Group plc, a UK company with French roots, centered on media advertising media buying.

Dentsu’s need to globalize

Driving this acquisition was Dentsu’s need to globalize, to create the necessary global footprint to compete with Publicis, WPP, Omnicom, Interpublic, Havas on one hand, and with newcomers Google and Facebook.

Dentsu Aegis Network created to overcome cultural issues

To overcome the important cultural issues of Japan-focused Dentsu, the “Dentsu Aegis Network” was created which combines seven major global brands:

• Carat
• Dentsu
• Dentsu Media
• iProspect
• Isobar
• Posterscope
• Vizeum

Dentsu acquires expertise in local markets

This acquisition enables Dentsu to acquire companies in local markets via this new European subsidiary. For European examples, see our listing of Japanese acquisitions in Europe.

Previously, Dentsu had acquired:

• Steak Group, a UK based digital media group
• Adjug, a UK based advertising exchange

Report on Japan’s media landscape (150 pages, pdf file):

Copyright 2013 Eurotechnology Japan KK All Rights Reserved

Nidec: “for everything that spins and moves”

Nidec acquires Ansaldo Sistemi Industriali S.p.A. from HVEASI Holding BV, affiliated with Patriarch Partners LLC. The acquisition was completed in May 2012.

Ansaldo Sistemi Industriali S.p.A (ASI) renamed: “Nidec ASI S.p.A.” and set up a Japan subsidiary Nidec ASI Japan Corporation to develop Nidec ASI’s business in Japan and South Korea.

Ansaldo Sistemi Industriali S.p.A.

Ansaldo Sistemi Industriali S.p.A. was founded in 1853 in Milano (Italy). Ansaldo Sistemi Industriali S.p.A. has about 1217 employees.

Sales in Fiscal Year 2011 were € 292 million.
Assets as of Dec 31, 2011 were € 469.1 million, fixed assets were € 56 million.

Businesses are:

• Motors, Generators and Drives Business
• generators
• Industrial Systems and Automation Business
• Services (Maintenance) Business

nidec (日本電産株式会社)

Nidec was founded on 23 July 1973 in Kyoto by Nagamori Shigenobu, and produces motors, machinery, optical parts, camera shutters and other electro-mechanical equipment.

Read our report on Japan’s electronics industry sector to learn more about NIDEC and its place in Japan’s electronics industry sector:

Copyright 2015 Eurotechnology Japan KK All Rights Reserved

Nikkei: “Tokyo Stock Exchange has learnt enough from the London Stock Exchange to set up a similar market on its own”

Tokyo AIM (the stock market joint venture between Tokyo Stock Exchange and London Stock Exchange) seems to be heading along a similar road as NASDAQ-Japan about 10 years earlier, according to an article in NIKKEI this morning (morning edition of March 26, 2012).

Tokyo Stock Exchange plans to create a market more welcoming than Tokyo AIM

Nikkei reports this morning that “Tokyo Stock Exchange has learnt enough from the London Stock Exchange to set up a similar market on its own. TSE plans to improve the rules of its own new market, so that TSE can create a more welcoming market”.

Reminds me of NASDAQ-Japan almost exactly 10 years ago:

At the end of 2002 I met with one of my friends, until a few days earlier CFO of NASDAQ-Japan, which terminated operations in Japan on October 15, 2002. I asked him as many questions as I could to build myself a good picture of why NASDAQ had not been successful in Japan, and why NASDAQ decided to terminate its operations in Japan. (After our conversation he offered my small company the used office furniture of NASDAQ-Japan at a good price, had I accepted this offer, my company’s people would all be sitting on x-NASDAQ-Japan chairs and desks…)

NASDAQ initially entered Japan in a joint-venture with Softbank

NASDAQ initially entered Japan in a joint-venture with Softbank, and built the NASDAQ-Japan stock exchange in cooperation with the Osaka Stock Exchange (OSE). When NASDAQ decided to terminate operations in Japan in October 2002, about 100 companies were listed on NASDAQ-Japan.

NASDAQ quit Japan, and NASAQ-Japan became the HERCULES Stock Market

The stock market built up by NASDAQ in Japan became HERCULES (full name: Nippon New Market Hercules) when NASDAQ exited Japan, and in December 2008 Osaka Stock Exchange acquired JASDAQ, and October 12, 2010 Hercules, JASDAQ and NEO were merged to form New-JASDAQ. This year, 2012, there were 7 IPOs on the New-JASDAQ, and about 1000 companies are currently traded on New-JASDAQ.

Interesting to see that NASDAQ-Japan’s market and probably also the market to evolve now from TOKYO-AIM are success stories from the OSE and the TSE points of view, while NASDAQ and now apparently London-Stock-Exchange AIM withdrew from Japan.

Lots to learn here for foreign companies with complex high-tech businesses such as stock exchanges entering and building business in Japan.

Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

by Gerhard Fasol

Capacitive MEMS sensor maker VTI Technologies Oy is a perfect fit for miniature ceramic capacitor specialist Murata Electronics Oy

Murata and private equity group EQT on October 11, 2011, announced the sale of VTI Technologies Oy to Murata for € 195 million. VTI Technologies Oy will be renamed Murata Electronics Oy, website:

VTI Technologies Oy

VTI Technologies Oy develops and manufactures acceleration, inclination, and angular momentum sensors using silicon based capacitive sensors based on proprietary 3D MEMS technology.

Net sales in 2010 were € 75.8 million.

EQT III acquired VTI from Breed Technologies in June 2002, VTI invested substantially in MEMS R&D and expanded sales by more than 75%.

EQT

EQT is a private equity fund, and was established in 1994 by Investor AB, AEA Investors, SEB and the founding partners.

• 17 funds with about € 22 billion capital raised
• Investment strategies: equity, mid market, infrastructure and credit
• about 120 investments and 60 exits
• approximately 140,000 employees and € 17 billion total sales within EQT portfolio companies
• 19 offices in 14 countries

EQT III

EQT III was established in 2001 with committed capital of € 2 billion and is now fully invested.

EQT III‘s focus was on medium-sized companies in Northern Europe in engineering, medical technology, telecom, automotive and branded consumer goods and business services.

Murata Manufacturing

Murata Manufacturing was founded by Akira Murata in Kyoto in October 1944, and focuses on ceramic passive electronics components, and manufactures the worlds smallest ceramic capacitors.

Read our report on Japan’s electronics industry sector:

Copyright 2015 Eurotechnology Japan KK All Rights Reserved

Rakuten continues global battle with Amazon.com

On September 21, 2011, Rakuten announced acquisition of 100% of the UK e-commerce portal site Play.com for UKL 25 million (approx. US$ 40 million).

Rakuten’s acquisition of Play.com (UK) follows the acquisitions of PriceMinister (France) and Tradoria (Germany).

Play.com

Play.com sells music, books, clothes, accessories and electronics, and has 14 million registered users and 7 million listed products. Play.com is the largest UK online seller of DVDs.
Play.com has approximately 500 employees.

Play.com was founded in 1998 on Jersey (Channel Islands) by Richard Goulding, Simon Perrée and Peter de Bourcier – all 28 years old – in backrooms of the local Athlete’s Foot store, run by Play.com founders Richard Goulding, Simon Perrée, and with investment from Zuma Investments Limited (registered in Jersey, see registration information in the JFSC Companies Registry here).

• In 2004 Play.com sold 15 million shipments and sales of UKL 190m
• In 2005 Play.com sold 25 million shipments and a sales of UKL 250m
• In 2011 Play.com is estimated to achieve sales of UKL 400 million

Play.com and the Channel Island tax loophole

Under EU rules established around 1980, merchandise priced less than UKL 18 (approx. US$ 30) from Channel Island based websites could be sold to customers in the UK without paying VAT (value added tax). UK plans to close this loophole by March 2012.

Copyright (c) 2011-2015 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Landis+Gyr acquired by Toshiba (60%) and Innovation Network Corporation of Japan (40%) for US$ 2.3 billion

Landis+Gyr acquired by Toshiba and The Innovation Network Corporation of Japan: this acquisition was finalized with a shareholder’s and share purchase agreement between Toshiba and INCJ and Landis+Gyr, announced on 25 July 2011.

Initially, on 19 May 2011, Toshiba had announced the 100% acquisition of Landis+Gyr by Toshiba alone for US$ 2.3 billion including assumption of debt. Apparently, The Innovation Network Corporation of Japan entered this partnership sometime between May and July 2011 as an additional investor.

Toshiba established a Special Purpose Vehicle (SPV):

• Toshiba invests: US$ 1.02 billion corresponding to 60% of equity
• INCJ invests: US$ 0.680 billion corresponding to 40% of equity

In addition, Toshiba assumed Landis+Gyr’s net debt of US$ 600 million, thus the total cost to Toshiba is:

• 60% equity in SPV: US$ 1.02 billion
• assumption of Landis+Gyr net debt: US$ 0.6 billion
• total acquisition cost to Toshiba: US$ 1.62 billion

The Innovation Network Corporation of Japan (INCJ) invested US$ 680 million into this SVP, acquiring 40% of the SVP’s equity.

Landis+Gyr – “manage energy better”

Landis+Gyr was founded in 1896 as Elektrotechnisches Institut Theiler & Co in Zug, Switzerland by Richard Theiler. In 1904, Richard Theiler appointed the engineer Heinrich Landis as his successor. Heinrich Landis partnered with Dr. Karl Heinrich Gyr in 1905, and the company changed its name to Landis & Gyr in 1905.

In 1998 Landis & Gyr was acquired by Siemens, and then again spun out in 2002 with the new version of the company name: Landis+Gyr.

Landis+Gyr produces smart meters, smart grid equipment and related technology and services, with the mission to “manage energy better”.

Landis+Gyr’s customers are mainly energy, gas and electricity utility companies throughout the world for their smart meter and smart grid networks.

The Innovation Network Corporation of Japan (INCJ)

The Innovation Network Corporation of Japan (INCJ) is an investment fund established on 27 July 2009 as a public-private partnership between the Japanese Government and 26 major Japanese corporations temporarily for 15 years.

Investment capability:

• Capitalization: YEN 300 billion (=approx US$ 3 billion)
  • Japanese Government: YEN 286 billion
  • 26 corporations: YEN 14 billion
• Japanese Government guarantees: YEN 1800 billion (=approx US$ 18 billion)
• Total investment capability: YEN 2100 billion (=approx US$ 21 billion)

INCJ has made a range of investments, the largest investment (YEN 200 billion = approx. US$ 2 billion) is in Japan Display.

In addition to the Japanese Government, 26 investors (total YEN 14 billion) are:

• Asahi Kasei Corporation
• Canon Inc.
• Osaka Gas Co., Ltd.
• Sharp Corporation
• The Shoko Chukin Bank, Ltd.
• Sumitomo Chemical Co., Ltd.
• Sumitomo Corporation
• Sumitomo Electric Industries, Ltd.
• Sony Corporation
• Takeda Pharmaceutical Company Limited
• Toshiba Corporation
• TOYOTA MOTOR CORPORATION
• JGC Corporation
• Development Bank of Japan Inc.
• Panasonic Corporation
• East Japan Railway Company
• Hitachi, Ltd.
• Marubeni Corporation
• Mizuho Bank, Ltd.
• Sumitomo Mitsui Banking Corporation
• Mitsubishi Chemical Holdings Corporation
• Mitsubishi Heavy Industries, Ltd.
• Mitsubishi Corporation
• The Bank of Tokyo-Mitsubishi UFJ, Ltd.
• GE Japan Corporation
• JX Nippon Oil & Energy Corporation

Toshiba

Toshiba is one of Japan’s eight top electronics group, which we analyze in our report “Japan’s electronics industries: mono zukuri“

Japan electronics industries – mono zukuri.

Copyright (c) 2011 Eurotechnology Japan KK All Rights Reserved

Competing with Amazon.com….

On July 28, 2011, Rakuten announced the acquisition of 80% of Germany’s e-commerce site Tradoria for a “double-digit million” amount.

Tradoria has been rebranded as Rakuten.de and has become part of Rakuten Deutschland GmbH.

Tradoria

Tradoria was founded in 2007, and today has more than 4400 online stores offering approximately 8 million products.

Tradoria is based in Bamberg, and before the acquisition by Rakuten, investors included:

• Seventure Partners (about 24 %)
• DuMont Venture (about 19 %)
• European Founders Fund of the Samwer brothers (about 11 %)

Copyright (c) 2011-2015 Eurotechnology Japan KK All Rights Reserved

Value Team SpA serves about 300 clients with about 3000 professionals

On April 25, 2011, NTT Data announced the acquisition of 100% of shares of Value Team SpA via the subsidiary NTT Data Europe GmbH & Co KG for about € 250 million.

Value Team SpA

Founded in 2004 as part of Value Partners to offer business oriented IT services, and grew via acquisitions in Brazil and in Italy.

In 2010, with about 3000 professionals served about 300 clients in the telecommunications, financial services and manufacturing sectors, and achieved € 308 million in revenues.

NTT Data

NTT Data, a subsidiary of Japan’s incumbent telecommunications group NTT, has been growing successfully around the globe with a series of acquisitions, including:

• itelligence AG (“We make the most of SAP solutions!”) of Germany
• BMW’s former IT Group, Cirquent
• Value Team SpA

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]]> https://eu-japan.com/2011/04/value-team-spa-ntt-data/feed/ 0 858 https://eu-japan.com/2010/12/hitachi-zosen-inova/ https://eu-japan.com/2010/12/hitachi-zosen-inova/#respond Mon, 20 Dec 2010 04:41:59 +0000 http://eu-japan.com/?p=562 by Gerhard Fasol

Waste is our energy! Energy-from-Waste (EfW)

Hitachi Zosen acquires former Von Roll Inova to form Hitachi Zosen Inova AG

AE&E Inova Holding AG filed for bankruptcy on December 3, 2010, and Hitachi Zosen Corporation (日立造船株式会社) acquired 100% of the shares of AE&E Inova Holding AG in Zurich with approval of the bankruptcy court, and the acquisition became final on December 20, 2010.

Subsequently AE&E Inova Holding AG was renamed Hitachi Zosen Inova AG or abbreviated, HZI AG.

Hitachi Zosen Inova AG history

Inova was originally a department of the company “Gesellschaft der Ludwig von Roll’schen Eisenwerke” founded in 1823, the purpose was thermal waste treatment. Inova was founded in 1933 as “L. von Roll Bamag AG”.

In 1960, Von Roll expanded to Germany and Japan, and in 1966 to France and Sweden, and 1975 to USA. Von Roll Environmental Technology Ltd was known as “Von Roll Inova Group”.

In 2003, Von Roll Inova Group was acquired by the AE&E Group (Austrian Energy & Environment Group), a subsidiary representing about 40% of A-Tec Industries AG (http://www.atec-industries.com/). Both AE&E Group and A-Tec Industries AG went into bankruptcy proceedings. An overview of the complex bankruptcy and reconstruction proceedings can be found on the A-Tec Industries Wikipedia-page.

AE&E Inova Holding AG filed for bankruptcy on December 3, 2010, and was acquired by Hitachi Zosen Corporation as of December 20, 2010.

Japan electronics industries – mono zukuri.

Japan electronics industries: mono zukuri

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

]]> https://eu-japan.com/2010/12/hitachi-zosen-inova/feed/ 0 562 https://eu-japan.com/2010/12/boehringer-ingelheim-ssp/ https://eu-japan.com/2010/12/boehringer-ingelheim-ssp/#respond Thu, 02 Dec 2010 02:55:33 +0000 http://eu-japan.com/?p=1896 Boehringer Ingelheim acquisition values SSP at approx US$ 900 million

Boehringer Ingelheim acquires SSP stage-by-stage: 9.2% in 1996, 60% in 2001, 100% in 2010

Boehringer Ingelheim acquires SSP (エスエス製薬株式会社), a Japanese OTC pharma company founded originally in 1765 as a pharmacy in Yaesu, Tokyo, starting with business cooperation, followed by staged investment over a period of five years, starting in 1995, followed by a Take-Over-Bid and delisting of SSP from the Tokyo Stock Exchange in 2010.

SSP (エスエス製薬株式会社), founded in 1765

History, and acquisition steps by Boehringer Ingelheim:

• SSP (エスエス製薬株式会社) was founded in 1765 as a pharmacy in Yaesu, Tokyo
• On 29 October 1927 the company was incorporated as （株）瓢箪屋薬房
• In 1940 the company name was changed to (エスエス製薬株式会社)
• 1969 IPO on the 2nd section of the Tokyo Stock Exchange
• 1971 IPO on the 1st section of the Tokyo Stock Exchange
• 1995-1996 Boehringer Ingelheim invests in SSP, and becomes largest share holder
• 2001 Boehringer Ingelheim increases shareholding to above 50%
• 15 February 2010 Boehringer Ingelheim Japan Investment GK (ベーリンガーインゲルハイム・ジャパン・インベストメント合同会社) issues a Take-Over-Bid (TOB), which is concluded on 15 April 2010, resulting in Boehringer Ingelheim Investment Japan acquiring a total of 93% of SSP shares.
• 16 July 2010 SSP is delisted from Tokyo Stock Exchange
• 1 October 2010 merger with Boehringer Ingelheim Japan Investment GK (ベーリンガーインゲルハイム・ジャパン・インベストメント合同会社)
• 19 November 2010 merger with BI Nippon Invest GK (BIニッポンインベスト合同会社)
• 19 November 2010 becomes subsidiary of Boehringer Ingelheim Japan KK (ベーリンガーインゲルハイムジャパン株式会社)
• 1 January 2017 as part of a global asset swap of Boehringer Ingelheim with Sanofi, SSP becomes a subsidiary of the French pharmaceutical group Sanofi (サノフィ株式会社)

Nippon Boehringer Ingelheim Co., Ltd. (ベーリンガーインゲルハイム ジャパン株式会社)

Nippon Boehringer Ingelheim Co., Ltd. (ベーリンガーインゲルハイム ジャパン株式会社) was founded in 1961 as a subsidiary of the German Boehringer Ingelheim Group, which was founded in 1885 in Ingelheim am Rhein in 1885.

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]]> https://eu-japan.com/2010/12/boehringer-ingelheim-ssp/feed/ 0 1896 https://eu-japan.com/2010/09/sony-barcelona-tec/ https://eu-japan.com/2010/09/sony-barcelona-tec/#respond Tue, 07 Sep 2010 10:01:30 +0000 http://eu-japan.com/?p=511 Sony Barcelona Tec technology center manufacturing LCD TV sets for Europe sold

Sony Barcelona Tec acquired by Joint Venture between Spanish Companies Ficosa International SA and Comsa Emte SL

Sony Barcelona Tec, the SONY Barcelona Technology Center was established in January 1973, and in August 2010 had about 1100 employees and was manufacturing LCD TVs for the European market. The site area is about 206,000 square meters, is located at Viladecavalls near Barcelona and can be seen here on Google Maps.

With the sale of Sony Barcelona Tec the center is divided into two parts:

• a manufacturing company whole owned and operated by Ficosa International SA
• a development and engineering company owned by a joint venture between Ficosa International SA (50%) and Comsa Emte SL (50%).

Ficosa International SA

Ficosa International SA is an automobile parts company founded in 1949 and employing about 6800 people.

Note: in 2014, Panasonic announced to acquire just under 50% of Ficosa for around US$ 275 million.

Comsa Emte SL

Comsa Emte SL is the second largest Spanish company in the engineering and infrastructure sector.

Copyright·©2010 ·Eurotechnology Japan KK·All Rights Reserved·

]]> https://eu-japan.com/2010/09/sony-barcelona-tec/feed/ 0 511 https://eu-japan.com/2010/06/rakuten-priceminister/ https://eu-japan.com/2010/06/rakuten-priceminister/#respond Wed, 16 Jun 2010 15:55:27 +0000 http://eu-japan.com/?p=925 Rakuten continues to globalize via acquisitions

Rakuten seeks to compete globally with Amazon.com

Rakuten acquires 100% of shares of PriceMinister S.A. for €200 million (= approx. US$ 250 million). The transaction is expected to close at the end of July 2010.

PriceMinister S.A.

PriceMinister was founded in 2000 by current CEO Pierre Kosciusko-Morizet, and Pierre Krings, Justin Ziegler and Olivier Mathiot in a former Zeppelin factory, and achieved revenues of € 40 million in 2009.

PriceMinister S.A.‘s website PriceMinister.com has approximately 12 million members, is visited by approximately 11 million users/month.

PriceMinister S.A. has about 100,000 sellers and 21,000 merchants offering about 160 million products.

PriceMinister S.A. has established online businesses in:

• France: http://www.priceminister.com
• United Kingdom: now: http://www.play.com/priceminister.html
• Spain: now: http://www.rakuten.es

The PriceMinister Group has five business areas:

1. guaranteed buying and selling (marketplace)
2. automobiles (classifieds): http://www.priceminister.com/nav/Loisirs_accessoires-auto
3. travel (price comparison): http://www.voyagermoinscher.com
4. real estate (classifieds)
5. email marketing

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]]> https://eu-japan.com/2010/06/rakuten-priceminister/feed/ 0 925 https://eu-japan.com/2009/04/square-enix-eidos-interactive/ https://eu-japan.com/2009/04/square-enix-eidos-interactive/#respond Wed, 22 Apr 2009 04:22:24 +0000 http://eu-japan.com/?p=1130 Eidos Interactive converted into Square Enix Europe

Square Enix on the path to globalization

Square Enix acquires the publicly listed British games company Eidos Interactive for £84.3 million (approx. US$ 130 million), Eidos shares were suspended from trading on April 21, 2009, and the shares will be cancelled on May 6, 2009.

Edits became formally part of Square Enix on April 22, 2009.

Eidos Interactive was going through a number of ups and downs, acquisitions and mergers previous to this sale of the company to Square Enix.

For Square Enix the acquisition of Eidos Interactive is a step in globalizing the company’s footprint: Eidos name will be changed into Square Enix Europe, so effectively Eidos is turned into Square Enix’ Europe operations.

Eidos Interactive

Eidos was founded in 1990 by Stephen Bernard Streater (graduated in Mathematics from Trinity College, Cambridge) developing Full Motion Video (FMV) compression software for RISC Computers, such as the Acorn RISC Computer. Stephen B Streater left and sold Eidos, and founded Forbidden Technologies, while Eidos turned to game software.

Around 2004/2005, Eidos suffered substantial losses and cash reserves were running low. Eidos had difficulties competing with Electronic Arts, Activision and other Western game makers. Eidos received acquisition offers from Elevation Partners, and the British Game maker SCi Entertainment, and on May 16, 2005, Eidos was sold to SCi Entertainment.

In 2008, SCi Entertainment reported losses, and SCi Entertainment changed its name back to Eidos plc.

• Revenues: £179.1 million (approx. US$ 270 million) (2006)
• Net income: £8.1 million (approx. US$ 12 million) (2006)
• Employees: 600

Eidos was best known for the games:

• Tomb Raider
• Hitman
• Deus Ex
• Legacy of Kain
• Thief

Square Enix

Square Enix was created on April 1, 2003 from the merger of the Japanese game companies:

• Enix (founded on September 22, 1975) and
• Square (founded on September, 1986).

On October 1, 2008 the Square Enix Group of companies was converted into a holding company structure, Square Enix Holdings. Square Enix Holdings includes the group companies:

• Square Enix Group
• Taito Group
• Square Enix Europe
• Eidos Group
• Shinra Technologies

Square Enix is best known for it role playing games including the series:

• Final Fantasy
• Dragon Quest
• Kingdom of Hearts

Japan’s games sector

With iconic traditional game companies including Nintendo, SONY, Konami, Sega Sammy, and new game giants including GungHo, LINE, and others, Japanese game companies have been setting the global game agenda for a long time, but do have some difficulties to globalize their Japanese success stories.

Read our report on Japan’s game makers and markets for detailed analysis of financials and trends and market structure.

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]]> https://eu-japan.com/2009/04/square-enix-eidos-interactive/feed/ 0 1130 https://eu-japan.com/2009/04/jean-claude-trichet-president-of-the-european-central-bank-ecb-in-tokyo/ https://eu-japan.com/2009/04/jean-claude-trichet-president-of-the-european-central-bank-ecb-in-tokyo/#respond Sat, 18 Apr 2009 12:12:37 +0000 http://eu-japan.com/?p=30 European Central Bank (ECB) President Jean-Claude Trichet gave a presentation here in Tokyo on April 18, 2009 about the current financial and economic crisis.

Trichet blamed the crisis on an underpricing of the unit of risk. He also emphasized that its not a general crisis affecting all companies and financial institutions, but that some badly managed companies and banks are in bad shape, while well managed companies and financial institutions are in good shape and doing fine.

Trichet praised excellent international cooperation in taking measures to improve economic and financial stability and he also mentioned that unconventional steps will be announced at future meetings.

Overall his words were very carefully chosen and defensive, well aware of the impact of his words on the capital markets



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]]> https://eu-japan.com/2009/04/jean-claude-trichet-president-of-the-european-central-bank-ecb-in-tokyo/feed/ 0 30 https://eu-japan.com/2009/03/kyocera-expands-in-europe-via-acquisition-of-ta-triumph-adler/ https://eu-japan.com/2009/03/kyocera-expands-in-europe-via-acquisition-of-ta-triumph-adler/#respond Sun, 22 Mar 2009 12:14:58 +0000 http://eu-japan.com/?p=33 by Gerhard Fasol

Kyocera acquires Triumph-Adler for € 98.7 million

Motivated by Triumph-Adler’s distribution network: 35,000 companies as customers in 33 countries

Kyocera is one of Japan’s powerful electronics companies, which together are about as large economically as the whole of the Netherlands.

Taking advantage of low EURO exchange rates and the high YEN, and low valuations during the current economic crisis, Kyocera acquired 93.84% (51,968,300 shares) of TA Triumph-Adler AG at a purchasing price of € 1.90/share for a total purchase price on the order of € 98.7 Million.

Kyocera acquired TA Triumph-Adler for its distribution network: TA Triumph-Adler has about 35,000 companies as customers in 33 countries, with 70% of sales in Germany, giving Kyocera a much larger distribution footprint in Germany and EU.

Kyocera launched the new brand “TASKalfa” for a new type of micro-particle toner for copy machines and a new software platform for copiers

Triumph-Adler

Triumph was founded 1896 as a bicycle maker, and has grown into a major European office equipment manufacturer and sales company. Triumph used to be famous for typewriters, with the disappearance of typewriters, Triumph went through a long sequence of restructuring and through many merger and acquisition transactions by many different owners including: Litton Industries, Volkswagen AG, Olivetti, Ideal Loisirs.

TA Triumph-Adler’s annual sales are € 298.5 million.

Read our report on Japan’s electronics industry sector to learn more about Kyocera and its place in Japan’s electronics industry sector:

Japan electronics industries: mono zukuri

Copyright 2009-2015 Eurotechnology Japan KK All Rights Reserved

]]> https://eu-japan.com/2009/03/kyocera-expands-in-europe-via-acquisition-of-ta-triumph-adler/feed/ 0 33 https://eu-japan.com/2009/01/coffee-with-the-foreign-minister-of-austria-in-tokyo/ https://eu-japan.com/2009/01/coffee-with-the-foreign-minister-of-austria-in-tokyo/#respond Fri, 23 Jan 2009 12:16:33 +0000 http://eu-japan.com/?p=35 Was invited to coffee with the Foreign Minister of Austria, Mr Michael Spindelegger, at the Embassy in Tokyo. Minister Spindelegger is in Tokyo for celebrating 140 years of Austria-Japan diplomatic relations, and he gave a short presentation.

Another reason for the Minister’s visit to Japan is that both Japan and Austria are non-permanent members of the United Nations UN Security Council for the two year period from January 1, 2009 to December 31, 2010.



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]]> https://eu-japan.com/2009/01/coffee-with-the-foreign-minister-of-austria-in-tokyo/feed/ 0 35 https://eu-japan.com/2008/12/suzuki-metal-garphyttan/ https://eu-japan.com/2008/12/suzuki-metal-garphyttan/#respond Thu, 25 Dec 2008 05:34:42 +0000 http://eu-japan.com/?p=1423 Suzuki Metal with Garphyttan to become global player of Nippon Steel Group’s wire rod business

Suzuki Metal Industry Co Ltd to issue news shares to be acquired by Nippon Steel Group to finance the acquisition of Garphyttan AB from Haldex Group

On December 25, 2008, Nippon Steel Group and Suzuki Metal Co Ltd announced the issue of additional share capital by Suzuki Metal, to be acquired by Nippon Steel Group. Suzuki Metal is to become a consolidated subsidiary of Nippon Steel Group, and use the investment to acquire 100% of valve spring wire maker Garphyttan from the Haldex Group.

The acquisition price is 800 million Swedish Kronor (=approx. YEN 9 billion, US$ 92 million). The acquisition is to be completed by April-June 2009.

Garphyttan Wire’s name will be changed to Suzuki Garphyttan, and will be a consolidated subsidiary of Nippon Steel Group.

In October 2012 Nippon Steel Corporation and Sumitomo Metal Industries were merged into Nippon Steel & Sumitomo Metal Corporation (NSSMC).

Garphyttan Wire

Garphyttan Wire produces advanced spring wire for combustion engines and transmission systems for cards and commercial vehicles, especially valve spring wire.

As of September 30, 2008, Garphyttan Wire had 471 employees, and sales of approx. SEK 1.1 billion (= JPY 19.3 billion, US$ 127 million)

Garphyttan Wire was founded in 1906.

Haldex Group

Haldex Group produces commercial vehicle systems, hydraulic systems, valve spring wire, traction systems and related products.

Haldex Group employs about 6154 people as of September 30, 2008.

Suzuki Metal Industry Co Ltd “The pioneer of special steel wire manufacturer in Japan”

Suzuki Metal Industry with this transaction became a consolidated subsidiary of Nippon Steel Corporation.

Suzuki Metal Industry was founded on May 1, 1938 in Kameido, Koto-ku, Tokyo. The company produces valve spring wire, piano wire, stainless steel wire, titanium wire, and other special wire products.

In FY2007, Suzuki Metal Industry achieved sales of YEN 41.4 billion (US$ 400 million) and employed about 811 people.

In October 2012 Nippon Steel Corporation and Sumitomo Metal Industries were merged into Nippon Steel & Sumitomo Metal Corporation (NSSMC).

On April 28, 2015, it was announced that Suzuki Metal Industry Co became a wholly owned subsidiary of NSSMC via a share exchange.

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]]> https://eu-japan.com/2008/12/suzuki-metal-garphyttan/feed/ 0 1423 https://eu-japan.com/2008/12/nokia-quits-japan-for-now/ https://eu-japan.com/2008/12/nokia-quits-japan-for-now/#respond Wed, 10 Dec 2008 12:18:15 +0000 http://eu-japan.com/?p=37 NOKIA’s Japan subsidiary was founded on April 3, 1989 – almost 20 years ago. On November 27, 2008 NOKIA announced to terminate selling mobile phones to Japan’s mobile operators, effectively withdrawing from Japan (except for purchasing, R&D and VERTU).

NOKIA’s sales figures in Japan were a well kept secret until last week when several Japanese newspapers wrote that NOKIA sold 200,000 phones during FY 2007: thus NOKIA’s market share was 0.39% – after 20 years of market entry efforts.

Considering the disastrous collapse of mobile phone handset sales in Japan, NOKIA’s move to quit sales in Japan actually makes a lot of sense. Nothing prevents NOKIA from re-entering Japan again in the future.

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]]> https://eu-japan.com/2008/12/nokia-quits-japan-for-now/feed/ 0 37 https://eu-japan.com/2008/11/nsg-stuart-chambers/ https://eu-japan.com/2008/11/nsg-stuart-chambers/#respond Mon, 03 Nov 2008 12:20:06 +0000 http://eu-japan.com/?p=39 October 16, 2008 by Gerhard Fasol

Stuart Chambers, CEO of NSG Group, gave a press conference on October 16, 2008, here are some notes and thoughts.

On February 16th, 2006, Nippon Sheet Glass’ offer for the 80% of Pilkington plc it did not already own, for US$ 3.14 billion in total, was accepted by Pilkington’s share holders and the acquisition was completed in June 2006. At the 142nd Annual Shareholder Meeting on June 27th 2008, Stuart Chambers was appointed Representative Executive Director, President and CEO of NSG Group.

Here some essential points of Stuart Chambers’ presentation, entitled “Four critical factors for Japanese corporates making major international acquisitions”.

The four critical factors in the title are:

1. Integration (share holders and customers demanded integration, because the value of the combined NSG + Pilkington after the acquisition must become bigger than the sum of its parts -> must change HR management, and board)
2. Repaying debt -> senior management must understand the balance sheet
3. Identifying growth opportunities for the future (glass for solar energy)
4. Succession

From the outset the aim was not to create a Japanese company with overseas subsidiaries, but to create an international company, headquartered in Japan and listed on the Tokyo Stock Exchange. Therefore the greatest changes needed to be made in Japan.

NSG Group changed from an exclusively Japanese Board, to a new Board structure:

Board of Directors: 12 (7 Japanese + 5 non-Japanese) and

Executive Officers: 23 (11 Japanese + 12 non-Japanese)

These changes were necessary in order to retain non-Japanese management talent from leaving the acquired company after the merger.

The Board structure was changed from the traditional Kansayaku (Corporate Auditor) structure to a Board with Committees.

HR management changes from internal promotion according to time served in each job level to the international practice of combining internal and external hiring according to capability and demonstrated performance ignoring age as a factor.



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]]> https://eu-japan.com/2008/11/nsg-stuart-chambers/feed/ 0 39 https://eu-japan.com/2008/10/nokia-sony-ericsson-results-likely-to-disappoint-cnbc-tv-interview/ https://eu-japan.com/2008/10/nokia-sony-ericsson-results-likely-to-disappoint-cnbc-tv-interview/#respond Thu, 16 Oct 2008 12:22:06 +0000 http://eu-japan.com/?p=41

More in our J-ELECTRIC report: http://www.eurotechnology.com/store/j_electric/

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]]> https://eu-japan.com/2008/10/nokia-sony-ericsson-results-likely-to-disappoint-cnbc-tv-interview/feed/ 0 41 https://eu-japan.com/2008/09/hm-green-field-market-entry-to-japan-opens-first-japan-store-in-tokyo-ginza-on-september-13-2008/ https://eu-japan.com/2008/09/hm-green-field-market-entry-to-japan-opens-first-japan-store-in-tokyo-ginza-on-september-13-2008/#respond Mon, 22 Sep 2008 12:24:49 +0000 http://eu-japan.com/?p=46 H&M entered Japan’s fashion market initially using a green field strategy, opening stores. On September 13, 2008, H&M opened the first store in Japan in Ginza, and is planning two more stores in Shibuya (see picture below) and in Harajuku.

H&M adapted it’s global way of doing things to Japan’s market needs – for example, H&M introduced “Quality Managers& in it’s Japan store, in order to match Japan’s consumers high expectations for quality (and I guess also to avoid problems with Japan’s recently introduced product liability laws).

One week after opening, customers are queuing in line to enter the store – typical waiting time is about 2 hours, daily number of visitors to the store are estimated ot be about 8000/day.

Closest foreign competitors in Japan include US retailer GAP, and Spanish retailer Inditex (Diseno Textil SA)’s ZARA.

Biggest Japanese competitor is Fast Retailing’s UNIQLO.

H&M is preparing to open the second and third stores in Shibuya (photo below) and in Harajuku.

Our comments:

H&M has had a very successful start and has created a successful opening “event”. To be successful longterm H&M will have to:

• sufficiently tune to Japan,
• continue to innovate,
• compete successfully especially with UNIQLO









Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

]]> https://eu-japan.com/2008/09/hm-green-field-market-entry-to-japan-opens-first-japan-store-in-tokyo-ginza-on-september-13-2008/feed/ 0 46 https://eu-japan.com/2008/09/iscar-ltd-of-israel-acquired-japanese-tungsten-carbide-tool-maker-tungaloy-for-us-1-billion/ https://eu-japan.com/2008/09/iscar-ltd-of-israel-acquired-japanese-tungsten-carbide-tool-maker-tungaloy-for-us-1-billion/#respond Mon, 22 Sep 2008 12:23:25 +0000 http://eu-japan.com/?p=43
• overview: Japan -> Europe direct investments and M&A
• overview: Europe -> Japan direct investments and M&A

22 Sept 2008, author: Gerhard Fasol

The Israeli company Iscar has completed the acquisition of Japanese competitor Tungaloy Corporation. Iscar acquired more than 90% of outstanding shares for around US$ 1 billion from Nomura Principal Finance Co.

Iscar is the world’s second largest maker of tungsten carbide cutting tools, and competitor Tungaloy is the world’s fifth largest. Iscar is controlled by Warren Buffet’s Berkshire Hathaway Inc. – Berkshire Hathaway acquired 80% of Iscar for US$ 4 billion in 2006.

The merged Iscar and Tungaloy will be better positioned to compete with global leader Sandvik AB, which has sales on the order of US$ 4 Billion.

Tungaloy Corporation emerged via a management buyout from Toshiba Tungaloy, with Nomura Principal Finance Co. as the largest share holder. Tungaloy has sales of YEN 50 Billion (approx. US$ 500 million), was founded in 1934, and has 2618 employees. Tungaloy is the fifth largest maker of Tungsten Carbide cutting tools in the world.

Iscar entered Japan’s market by opening a 100% owned subsidiary company in 1994, about 14 years ago.

To my knowledge this acquisition is also far larger than any acquisition in Japan by any European Union (EU) company this year (last year, in 2007 Permira announced the acquisition of Arysta LifeScience Corporation for US$ 2.2 Billion and completed the deal during 2008). The three largest acquisitions ever of Japanese companies by EU companies have been Vodafone’s acquisition of J-Phone (transaction value: about US$ 20 Billion), Daimler’s acquisition of Mitsubishi Motors (transaction value: about US$ 2-3 Billion), and Renault’s investment in Nissan (initial transaction value: about US$ 3 Billion) – of these three, only the Renault investment in Nissan was successful, the other two failed.

Copyright notice:

Warren Buffet: Warren Buffett at the 2015 SelectUSA Investment Summit.

Permission (commons.wikipmedia.org):

This work is in the public domain in the United States because it is a work prepared by an officer or employee of the United States Government as part of that person’s official duties under the terms of Title 17, Chapter 1, Section 105 of the US Code. Note: This only applies to original works of the Federal Government and not to the work of any individual U.S. state, territory, commonwealth, county, municipality, or any other subdivision. This template also does not apply to postage stamp designs published by the United States Postal Service since 1978. (See § 313.6(C)(1) of Compendium of U.S. Copyright Office Practices). It also does not apply to certain US coins; see The US Mint Terms of Use.

This file has been identified as being free of known restrictions under copyright law, including all related and neighboring rights.

Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

NTT Data thus gains BMW as largest customer in Europe

Today, August 1, 2008, NTT Data and BMW agreed, that NTT Data will acquire 72.9% of the outstanding shares of Cirquent GmbH in order to globalize.

Cirquent was part of the BMW Group, and is Germany’s 7th biggest system integrator

Between 1992-2008 Cirquent was part of the BMW Group. Cirquent is No. 7 in the Luenendonk ranking of German system integrators. Among Cirquent customers are BMW, Deutsche Boerse, Muenchner Rueck (reinsurer), and T-Mobile Germany. Cirquent has about 1800 employees and achieved sales of EURO 286 Million in 2007.

Cirquent share ownership ratios after this acquisition:

• 72.9% NTT Data
• 25.1% BMW AG
• 2% Cirquent GmbH employees

After this acquisition, BMW becomes NTT Data’s largest customer in Europe. We consider this acquisition an excellent move by NTT Data, NTT Data acquired Germany’s 7th largest system integrator, including about 1000 highly qualified employees, and at the same time also gained BMW as largest customer in Europe, together with a number of other blue chip customers such as Deutsche Boerse, Muencher Rueck and T-Mobile Germany.

Read more about Japan’s telecom sector in our J-COMM report.

Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

by Gerhard Fasol

EPCOS becomes part of 100% owned subsidiary TDK-EPC Corporation

On July 31, 2008 TDK launched an offer to buy all outstanding shares of EPCOS, thus acquiring 100% of EPCOS.

Value of the acquisition transaction was on the order of YEN 200 Billion (approx. US$ 1.859 billion)

EPCOS

EPCOS was created in 1999 from Siemens-Matsushita Components, which was a joint venture between SIEMENS and Matsushita, created in 1989.

TDK-EPC Corporation

TDK-EPC Corporation is a 100% owned subsidiary of TDK Corporation, and was formed on October 1, 2009 following the acquisition of EPCOS by TDK.

The company combines the electronic components business of TDK with EPCOS AG and its subsidiaries.

The company has about 36,000 employees globally, and global sales are approx. EURO 1.8 Billion (in FY 2012).

Products are mainly passive electronic components, including:

• capacitors
• ceramic components
• EMC filters
• inductors
• resistors
• RF modules
• surface acoustic wave components (ASW filters)
• surge arresters
• ferrites

Japan electronics industries – mono zukuri. Preview this report:

Copyright 2008-2015 Eurotechnology Japan KK All Rights Reserved

Announcement

Photos of the event

Announcement text:

With the very high EURO and low valuations of many Japanese companies, and with changing attitudes in Japan, now is an excellent time for European companies to start or expand business in Japan.

There are many ways to start or expand business in Japan, and acquiring a Japanese company is one of the paths often selected by European companies to grow in Japan.

Some acquisitions of Japanese companies by European corporations have led to fantastic successes – while others have led to catastrophic failures.

The presentation will discuss the key factors for European companies to succeed in acquiring a Japanese company, and some of the key reasons for failure, based on the speakers 23 years of experience with Japan’s high-tech sector.

Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

Two practitioners from Tokyo will debate the changes in Japanese attitudes to mergers and acquisitions. During the course of this seminar, we will cover M&As between Japanese companies, the slow impact of foreign investment into Japan, and the outward investment strategies of Japanese companies.

Speakers:

Dr Gerhard Fasol, President, Eurotechnology Japan KK

David Syrad, Managing Director/Managing Director Asia, A.K.I. Japan Limited

Time and Date:

Friday April 18, 2008, Sandwiches: 12:30, Seminar: 13:00-14:30

Location:

Daiwa Foundation Japan House, 13/14 Cornwall Terrace, London, NW1 4QP

Price: free of charge

To register: biz @ aptn.org

Organizer contact: Louis Turner Tel. +44 – 790 5204 677

More information:

www.aptn.org

Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

Yamaha acquires Bösendorfer: Vienna piano manufacturer L. Bösendorfer Klavierfabrik GmbH founded in 1828

L. Bösendorfer Klavierfabrik GmbH was founded in 1828 in Vienna (Austria), and is one of the world’s most respected piano manufacturers. Bösendorfer was sold to a US wood manufacturing company, later by an Austrian Bank, which itself was acquired by a US investment fund, and as a consequence the Japanese company Yamaha acquired 100% of L. Bösendorfer Klavierfabrik GmbH. The acquisition was announced on 21 December 2007, and is expected to be completed early in 2008.

L. Bösendorfer Klavierfabrik GmbH

L. Bösendorfer Klavierfabrik GmbH was founded on 25th July 1828 in Vienna (Austria) by Ignaz Bösendorfer.

The company gained the distinction “k.k. Hof-Claviermacher” (Piano Maker by appointment to the Royal and Imperial Court of Austria) in 1839, and in 1858 was elevated to the title “Kammerlieferant des Kaisers”.

Franz List, who was known for his vigorous key play, played largely on Bösendorfer Pianos which could cope well with Franz List’s forceful style.

The company went through many difficulties caused by the wars.

1966 the company was sold to the US company Kimball International.

2002 the company was acquired by the Austrian Bank BAWAG. BAWAG itself went through a crisis and was acquired by the US fund Cerberus, leading to the sale of L. Bösendorfer Klavierfabrik GmbH to Yamaha.

Founded: 25 February 1828
Employees: 180
Net sales: approx. € 13.5 million (Fiscal Year 2006)
Total assets: approx. € 15.7 million (Fiscal Year 2006)

Yamaha Corporation (ヤマハ株式会社) TSE 7951

Yamaha Corporation (ヤマハ株式会社) (Tokyo Stock Exchange TSE 7951) was founded on 12 October 1887 by Torakusu Yamaha (山葉寅楠) as Nippon Gakki Company, Limited (日本楽器製造株式会社) (= Japan Musical Instrument Manufacturing Corporation) in Hamamatsu, Shizuoka-Prefecture, as a manufacturer of musical instruments.

Revenues: YEN 432 billion (US$ 4 billion) (FY ending March 2015)
Employees: 19,967 (March 2015)

Products include:

• musical instrument
• electronics
• motorcycles
• power sports equipment
• …

Copyright (c) 2007-1016 Eurotechnology Japan KK All Rights Reserved

• Foundation 28 November 2007
• Start of business 1 January 2008
• €18,000 (¥2.9 million)
• Capital ratio:
  • 60% Yamaha Motor Europe N.V. (wholly owned by Yamaha Motor Co. Ltd)
  • 40% Mitsui Automotive Europe B.V. (wholly owned by Mitsui & Co Ltd)
• Sales € 450 million (estimate for FY2008)
• Number of employees 7
• Business management of import, marketing and sales companies in Germany, UK, Austria, Hungary, Czech Republic, and Poland

Yamaha Motor Middle Europe B.V. (YMME) fully owned subsidiaries

• Yamaha Motor Deutschland GmbH
• Yamaha Motor (UK) Limited
• Yamaha Motor Austria GmbH
• Yamaha Motor Hungary Kft
• Yamaha Motor Czech Spol s.r.o.
• Yamaha Motor Polska Sp. z.o.o. (previously Mitsui Motor Polska Sp. z.o.o.)

Sumitomo Chemical (住友化学株式会社) acquired Cambridge Display Technology (CDT) under a merger agreement, paying an acquisition price of US$ 285 million in cash.

• 1998: Sumitomo Chemical starts P-OLED development
• 2001: Sumitomo Chemical and CDT Ltd (fully owned subsidiary of CDT Inc) enter into a cooperation agreement including technology licensing
• May 2002: Sumitomo Chemical makes an equity investment in CDT Ltd
• November 2005: Sumitomo Chemical established joint-venture SUMATION Co Ltd together with CDT Ltd for the development, manufacture and sales of P-OLED materials
• 2007: Sumitomo Chemical acquires CDT

Cambridge Display Technology (CDT)

Cambridge Display Technology (CDT) is based largely on Professor Sir Richard Friend’s and his team’s inventions and developments of polymer light emitting diodes (P-OLEDs).

CDT before acquisition was established in 1999, traded on NASDAQ (OLED), and sales in 2009 were US$ 8 million, and employed 130 people.

CDT holds many patents and intellectual property in the field of P-OLEDs.

Copyright·©2014 ·Eurotechnology Japan KK·All Rights Reserved·

50 years European Union – 50 Years Treaty of Rome

Today was the 50th anniversary of the Treaty of Rome which was at the beginning of the European Union.

The Treaty of Rome (Wikipedia) (“Treaty establishing the European Economic Community”) was signed on 25 March 1957 by Belgium, France, Italy, Luxembourg, the Netherlands and West Germany and came into force on 1 January 1958.

The Text of the Treaty of Rome is here as a pdf file.

In Tokyo we had a big party at the top of Roppongi Hills – 52nd floor. Here are some pictures…

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I took these photographs standing close to the perimeter of the Russian Embassy in Tokyo, which is heavily guarded by Japanese police. When I took the photographs of the green Tokyo Tower, a police officer standing guard asked me, if Tokyo Tower from now on will always be green. I told him that its only today for St. Patrick’s Day. The Japanese police officer did not know about St. Patrick’s Day, so I explained St. Patrick’s Day to him….

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Summary of the event and photographs here:

https://web.archive.org/web/20160815232148/http://www.fcc.or.jp/lunch160307.html

or here

https://web.archive.org/web/20111022052713/http://www.fcc.or.jp/lunch160307.html

Dowload the presentation here

https://web.archive.org/web/20070709231130/http://www.fcc.or.jp/pdf/FCCJ_160302.pdf

From the Announcement:

In his presentation, Dr. Fasol will explain the essentials of Japan’s mobile phone market, why and how it is so different to Europe’s. He will also talk about some of the reasons why it is so difficult for European companies to succeed and uncover opportunities and the keys to success for European companies in this important market.

More in our report about Japan’s telecom sector.

Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

On Monday 19th February Gerhard Fasol gave a talk “Trends in high technology in Japan”, covering the following points:

• “Japan is a technology super power – full of creativity and power to innovate” (Gerhard Fasol’s presentation to the President of Germany)
• The myth: nobody invests in Japan – all investment goes to China
• M&A case study: acquisition of a Japanese pharmaceutical factory including R&D
• Innovation case study 1: GaN LEDs invented in Japan, replace light bulbs and fluorescent tubes
• Innovation case study 2: e-Money
• Innovation case study 3: Japan’s telecom industry, overview, e-Japan I and II, u-Japan, wireless industry
• M&A case study: Japan’s telecom sector

The European Central Bank (based in Frankfurt) manages the EURO, is one of the world’s most important central banks, and uses QR-codes to link traditional PC-webpages to mobile pages.

For qr-codes and their business applications

Copyright 2013 Eurotechnology Japan KK All Rights Reserved

Ericsson’s CEO, Carl-Henric Svanberg, Ericsson CSO – Chief of Strategy, Japan-CEO Rory Buckley and other Ericsson top management presented Ericsson’s strategy and vision. About 100 investors and investment bank analysts were invited to attend.

I was given the opportunity to share the lunch table with CEO Carl-Henric Svanberg and had a fascinating discussion (some of his comments flowed into our company’s project report to the European Union on benchmarking Japan’s vs EU’s fixed and mobile telecommunications and broadband sectors).

With some of the largest and most advanced mobile investments, Japan’s mobile market is one of the most important markets globally for Ericsson. Recently Ericsson won major contracts from SoftBank and eMobile.

Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

Reasons for the acquisition

• Nidec acquires sales and business channels into the automotive industry, where track record is required
• Talent acquisition of highly qualified in-car motors engineers
• Contribute to Nidec’s globalization: VMA operators in Europe, North-America and China.

Valeo’s Motors & Actuators (VMA) business

• Business: manufacturing electric motors for automobiles. Motors for airflow systems, body closure systems, seat positioning systems, brake systems.
• Employees: approx. 1700
• Net sales: €253 million (FY ending December 31, 2005)

Resulting Nidec subsidiaries after completion of acquisition

Holding and administration company: Nidec Motors & Actuators in France

• NIDEC MOTORS & ACTUATORS (GERMANY)
• NIDEC MOTORS & ACTUATORS (POLAND)
• NIDEC MOTORS & ACTUATORS (SPAIN)
• NIDEC MOTORS & ACTUATORS (USA)
• NIDEC MOTORS & ACTUATORS (MEXICO)

Nidec “everything that spins and moves”

Nidec was founded by Chairman Shigenobu Nagamori in 1973 in Kyoto, and focuses on “everything that spins and moves”.

Learn about Nidec and Japan’s electronics industries

Copyright 2006-2019 Eurotechnology Japan KK All Rights Reserved

Tero Ojanpera, Exec VP and CTO of NOKIA, gave an overview of NOKIA’s vision of communications, other speakers and panelists included Juho Lipsanen, Finland CEO of TeliaSonera, KDDI Chairman Murakami.

The day before I briefed and had a long discussion with the top management team of TeliaSonera-Finland.

Panel discussion with TeliaSonera CEO Juho Lipsanen and KDDI-Chairman Murakami.

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The next day, October 27, 2006, the Finland-Japan Ubiquitous Society Conference was held. Tero Ojanpera, Exec VP and CTO of NOKIA, gave an overview of NOKIA’s vision of communications, other speakers and panelists included Juho Lipsanen, Finland CEO of TeliaSonera, KDDI Chairman Murakami.

Panel discussion with TeliaSonera CEO Juho Lipsanen and KDDI-Chairman Murakami.

Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

Following Vodafone’s decision to end business in Japan and the announcement of the sale of Vodafone-Japan to SoftBank, this author has been asked to brief the Technology Attaches of the 25 EU Embassies in Tokyo on Japan’s mobile phone and telecom sector.

The EU Technology Attaches were particularly interested in the impact on Europe by the termination of by far the biggest ever European investment in Japan. Clearly it is also important to determine, what other European companies can learn from Vodafone’s experience.

More details in our blog post:
“Why did Vodafone fail in Japan and sell to SoftBank?“

Eurotechnology Japan KK has been awarded a contract by the European Union to benchmark Japan’s telecom sector vs EU and make recommendations.

Japan telecommunications industry market report

Copyright 2013 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Vodafone brand is replaced by the Softbank brand

“SoftBank” replaces “Vodafone” brand in Japan following Vodafone’s decision to sell all Japan operations to the Softbank Group (after Vodafone had previously split off and sold fixed-line and other operations to Softbank in earlier transactions).

Photographs below show the world famous Vodafone board on Tokyo-Shibuya’s Hachiko-square being replaced by the SoftBank advertisement from June 14, 2006.

Japan telecommunications industry market report

Copyright 2013 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

The Vodafone brand is replaced by the SoftBank brand all over Japan

Saturday June 10, 2006 was the first time we saw SoftBank replacing the Vodafone brand in Japan – bringing a formal end to Europe’s largest ever investment in Japan.

Vodafone’s withdrawal from Japan is a turning point in more ways than one and has wider implications for Europe (read below).

Vodafone’s withdrawal also shows, that the values of cross-cultural management skills are often underestimated.

SoftBank’s brand strategy

Upper image shows the world-famous Vodafone board on Shibuya’s hachiko square, which has appeared in many movies and TV shows. It will soon be replaced.

Lower image shows one of the first SoftBank advertisements in Tokyo’s busiest commuter railstation Shinjuku showing Sharp’s mobile-TV handset.

The photo demonstrates SoftBank’s brand strategy of partnering with world-famous brands, such as with Apple’s iPod and Sharp’s AQUOS display brand.

Implications for Europe of Vodafone’s withdrawal from Japan

As a European myself, I am looking at the wider implications for Europe of Vodafone’s withdrawal from Japan – and our company was recently awarded a contract by the European Union Government on exactly these issues – as well as others.

Vodafone’s investment was by far the largest European investment in Japan. What is maybe less well known is that Vodafone was dispatching a relatively large stream of managers between several
continents (Europe, Australia etc) and Japan. Several times when visiting the KDDI Designing Center for example I could meet young German Vodafone managers who had just arrived for a management position at Vodafone-Japan, and who were studying the mobile phone handsets in KDDI’s showroom. These expatriates all left within a few weeks of SoftBank taking control of the company.

As a result of these interactions, Vodafone could bring J-Phone’s J-Sky mobile internet service to Europe, which was adapted for European conditions and rebranded “Vodafone Live!”. There would be no “Vodafone Live!” in Europe without Vodafone’s acquisition of J-Phone (including JSky). Vodafone also brought SHARP and Toshiba mobile handsets to Europe.

Apart from the immediate impact on Vodafone as a Corporation, we expect also a more general longterm impact from the strong reduction of Europe-Japan technology exchanges due to Vodafone’s withdrawal from Japan.

Vodafone’s withdrawal from Japan also shows how difficult it is for European telecom firms to succeed in Japan – and for Japanese firms in the telecom sector to succeed in Europe. Our company knows this first-hand from our work for NTT-Communications, and some other Japanese companies. – Read our presentation to Japanese industry associations here (in Japanese language).

It also shows how easy it is to underestimate the importance of cross-cultural management skills and the associated perils

While large US corporations, including INTEL, General Motors, and Motorola have been forced by confrontation with Japan’s competition to completely reshape themselves, this has not yet happened to any large European corporation because of the larger perceived separation between EU and Japan.

Comparing Europe and Japan in telecoms….

Japan telecommunications industry market report

Copyright 1997-2013 Eurotechnology Japan KK All Rights Reserved

Read an updated report of Japan’s broadband market, ADSL and FTTH here: Eurotechnology Japan Report on Japan’s telecom sector.

Copyright·©1997-2013 ·Eurotechnology Japan KK·All Rights Reserved·

IKEA had attempted earlier to establish business in Japan via a joint-venture established in 1974. This Joint-Venture was terminated in 1986, and IKEA ended business in Japan in 1986. Interestingly – and this is not the only such case – its only that IKEA itself at that time failed in Japan. The business IKEA created in this joint-venture actually continued successfully without IKEA even after IKEA had left Japan.

About 20 years later, this is now IKEA’s second venture into Japan.

The photographs shows Mr Koshichi Fujishiro, the Mayor of the City of Funabashi, and Mr Gordon Gustavsson, Manager of the new IKEA Funabashi store sawing the traditional log. Witnessing the log sawing ceremony are Ms Akiko Domoto, Governor of the Chiba Prefecture, His Excellency, Mikael Lindstrom, the Ambassador of Sweden, Anders Dahlvig, CEO of the global IKEA Group and Tommy Kullberg, CEO of IKEA-Japan:

A JR-Keiyo Line train with IKEA logos passing the new IKEA store in Minami-Funabashi:

Copyright·©1997-2013 ·Eurotechnology Japan KK·All Rights Reserved·

Investor AB’s corporate academy Novare requested education about Japan’s technology industry sector

Eurotechnology Japan KK educates 30 CFOs of Investor AB portfolio companies about Japan

April 24, 2006 was my Swedish Day: for breakfast I was invited to IKEA’s opening party for their new store in Funabashi (I met even with the global Chairman of IKEA – that he attended the opening in Funabashi shows how seriously IKEA is taken the market entry to Japan) – we had done some IT work for IKEA.

Lunch and afternoon I spent with about 30 Swedish CFO’s / controllers of some of the largest Swedish corporations, who had come to Japan on a study tour. These CFO’s/Controllers were all working at companies in Investor AB’s portfolio, and the program was organized by Investor AB’s Corporate Academy Novare.

Investor AB CFOs needed education about Japan’s telecom sector, particularly regarding Ericsson and Nokia

The Swedish controllers had asked for briefing on Japan’s telecom industries. Some of their companies are considering to start, re-start, or grow faster in Japan, so there were many detailed questions about business in Japan, what can go wrong, personell issues, experience of other multinationals, and of course a lot of questions about IKEA and Vodafone.

My presentation was similar to the presentation I had given on March 23, 2006 to the Technology Attaches of the Embassies of the 25 European Union countries, which lead the European Union to award our company a project contract about EU vs Japan benchmarking issues in telecoms and key technology areas.

Copyright 1997-2013 Eurotechnology Japan KK All Rights Reserved

Presentation to EU Technology Attaches at the Embassy of the European Union in Tokyo by Gerhard Fasol

by Gerhard Fasol

Today (March 23, 2006) I was invited to brief the Technology Attaches of the Embassies of the 25 European Union countries here in Tokyo about Japan’s telecommunications sector (both fixed net and wireless) in a one hour presentation + discussion. I had offered several alternative topics and the conference of EU Technology Attaches selected the most provocative title I had offered: “Why Japan is several years ahead of Europe in telecommunications and what Europe can do to catch up”

Vodafone KK’s Chairman and former NTT-DoCoMo Vice-President Tsuda, who had worked 34 years at NTT and DoCoMo (and who resigned from his Vodafone-Japan CEO position a few weeks after being head-hunted), said in a recent interview with Bloomberg that “Japan is way ahead in 3G”. – therefore, although this title is clearly provocative, it’s clearly worthwhile examining this question. With the sale of Vodafone KK to SoftBank last week, the timing of this briefing was particularly interesting. My presentation discussed the following questions:

• Is Japan ahead of Europe in Telecommunications and fixed as well as wireless broadband?
• Why?
• What is the impact?
• Is this important?
• What Europe can do to catch up

EU awards project contract to Eurotechnology Japan KK to document the status of fixed and wireless broad band communications in EU vs Japan

As a consequence of this presentation the EU awards project contract to Eurotechnology Japan KK to document the status of fixed and wireless broad band communications in EU vs Japan, and to prepare recommendations for the EU to learn from Japan, and accelerate progress in Europe.

Japan telecommunications industry market report

Copyright 1997-2013 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Why did Vodafone fail so dramatically in Japan?

Quick answer

Vodafone failed in Japan not for one single reason but for hundreds of reasons, which can be grouped into two groups

1. Soft factors:
   • Japan knowledge at HQ, and knowledge at HQ about the specifics of Japan’s telecom sector (or lack thereof).
   • choice of management structure (there were attempts to correct the management structure, however too little and too late).
   • attitude displayed both privately e.g. within the Japanese industry sector and publicly via marketing messages and advertising
   • choice of executives and lower ranking managers and their knowledge and experience in Japan’s telecom sector (or lack thereof)
   • lack of sufficient know-how and experience to manage a large Japanese company, and particular the chain of retail stores
   • and many more
2. Hard factors:
   • far too low budgets for infrastructure investment resulting in much lower coverage and network quality compared to competitors NTT-DoCoMo and KDDI/au and TuKa, Willcom and others. As a consequence of far too low investment budgets, Vodafone failed three times to introduce 3G services in Japan. (3G services were not successfully introduced until after the acquisition by Softbank, and after conversion of Vodafone KK to Softbank-Mobile).
   • mobile phone handsets were inferior to the handsets offered by competitors NTT-DoCoMo and KDDI, and TuKa
   • and many more

Long answer

Find a long answer in this blog post below, in our other blog posts, and in some detail including statistics and financial data in our Softbank Report.

On Friday March 17, 2006, Vodafone and Softbank announced that Vodafone sells Vodafone KK (the totality of all Vodafone operations in Japan) to Softbank.

It has been reported that on Monday March 20, 2006, Softbank started to move all Vodafone KK staff, furniture and equipment from Vodafone KK’s former headquarters in the top floors of the Atago-Greenhills-Mori-Tower to Softbank headquarters in Shiodome (near Shinbashi). Also Softbank started to arrange that essentially all foreign expatriate managers left Vodafone KK – some stayed in Japan working for other IT companies, some returned to European Vodafone divisions, and some pursue telecom careers in USA, India, Bangladesh, or elsewhere.

By total coincidence, I had dinner a high-level manager of Vodafone KK, of European nationality, at the indian restaurant Moti’s in Tokyo-Roppongi on exactly the same day, the Friday March 17, 2006 a few hours after the sale of Vodafone KK to Softbank was announced. I asked him: “Which of the following is true:”

1. Vodafone never did any market research in Japan?
2. Vodafone did market research in Japan, but the quality was low?
3. Vodafone did market research in Japan, but nobody read it?

This Vodafone KK manager’s answer at the indian dinner was (3): market research was done about Japan’s mobile phone market, but the market research was not sufficiently taken into account in the business and strategy planning.

Fact is, that Vodafone KK took many major strategy and market decisions in Japan, which were not related to the realities of Japan’s market. Here one example. When “rebranding” (=changing the company / product / services names) from J-Phone to Vodafone, this “rebranding” campaign was centered on global roaming, i.e. Vodafone enabled Japanese customers to use Japanese J-Phone/Vodafone mobile phones in a very large number of countries outside Japan as well as inside Japan. This was at a time, when Japan’s mainstream mobile 2G phone system which both DoCoMo and J-Phone used was PDC, while much of the rest of the world, especially Europe used GSM. However, what Vodafone overlooked was, that at that time DoCoMo had about 30,000 roaming customers, out of approx. 50 million subscribers, i.e. only about 0.06% of Japanese mobile phone users used international roaming at that time. Thus Vodafone KK in Japan focused their main nation-wide poster and TV and other media campaign on about 0.06% of the Japanese market – less than a niche. (The reason we know how many roaming customers DoCoMo had at that time, is because one of Vodafone KK’s competitors in Japan engaged our company Eurotechnology Japan KK to analyze Japan’s roaming market, and help our client to develop strategy to better compete with Vodafone KK’s roaming products, which were aggressively marketed, and the core of Vodafone KK’s marketing focus).

Another example was Vodafone KK’s strategic focus on Japan’s prepaid market. In 2006 there were about 2.6 million prepaid mobile phone customers in Japan, i.e. about 2.7% of the market, while DoCoMo had about 45,200 prepaid subscribers, i.e. about 0.09% of DoCoMo’s subscribers were prepaid customers. Since the prepaid market in Europe (especially Italy where about 1/2 of the market is prepaid) is extremely important and highly profitable, Vodafone decided on the strategy to focus strongly on the development and growth of Japan’s prepaid market. Almost at the same time however, a national campaign started in Japan linking unregistered and illegally traded prepaid mobile phones to crime, and a law was proposed in Japan’s parliament to outlaw any type of prepaid mobile phones. Thus Vodafone KK found itself on the one hand promoting and investing to develop prepaid mobile phone services in Japan, developing, purchasing (as was the business model in Japan at that time) and bringing to market special prepaid handsets, and organizing national media campaigns promoting Vodafone prepaid mobile phones, while at the same time on the other hand facing the possibility that Japan’s parliament would outlaw these same prepaid mobile phones, and a broad press and TV national discussion on how prepaid mobile phones are linked to crime. The end result was, that instead of outlawing prepaid mobile phones, it was decided to introduce far stricter registration requirements and ID requirements for mobile phones and especially for prepaid mobile phones, and the unauthorized/unregistered sale or transfer of prepaid mobile phones in Japan was made a crime. The end effect for Vodafone of course was a commercial failure of Vodafone’s prepaid mobile phone campaign, in addition to a general decrease of ARPU (average revenue per user).

As a consequence of these and other factors, Vodafone KK’s market share continuously decreased, subscribers moved from Vodafone KK to DoCoMo and KDDI/au, and the financial performance of Vodafone KK deteriorated, in the end convincing Vodafone that the best option was to sell Vodafone’s Japan operations and terminate business activities in Japan.

You can find further details and statistics, financial performance and market share data during this period in our Softbank report.

Japan telecommunications industry market report

Copyright (c) 2013-2023 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Bloomberg: Vodafone-Japan CEO Tsuda seeks growth in Japan, not sale

About one year ago, in an interview with Bloomberg (“Vodafone KK’s Tsuda seeks growth in Japan, not sale“), I mentioned that a sale of Vodafone’s Japan operations to Softbank might be the way Vodafone will go in Japan. This seems to be happening now and negotiations to this effect were confirmed by both Softbank and Vodafone over the weekend.

The potential deal

Although a deal has not been closed yet, it is widely reported that a sale of Vodafone’s Japan operations to Softbank is very likely to be closed within a few weeks. What could this deal look like?

As reported by Bloomberg Vodafone KK’s capitalization at the point of delisting from the Tokyo Stock Exchange was around YEN 1.4 Trillion (= about US$ 12 Billion). Bloomberg mentions estimations by London based analysts who value Vodafone KK in the range US$ 14 to 16 Billion. Of course, if a deal is actually concluded, it might be a complex deal with several components, not just a simple cash price, and any cash value will not be determined by analysts in London, but on the negotiating table between Softbank and Vodafone, and the final deal could be more complex than a simple sale against cash payment.

In any case, this deal – if it happens – promises to become one of the largest M&A transactions ever in Japan sofar in terms of cash value. Vodafone is reported to prefer a cash deal, and Softbank has been reported to consider a leveraged buy-out (LBO) where Softbank will take debt against the to-be-acquired company.

It has also been reported that Softbank seems to be planning to change the name of the resulting company, so the “Vodafone” brand is not likely to survive in Japan.

What is Softbank likely to do with Vodafone’s Japan operations

An acquisition of Vodafone’s Japan operations will be the completion of Softbank‘s march to build a full-scale telecommunications group on a par with NTT and KDDI through a series of acquisitions plus internal growth.

Softbank in this new shape will become a much more serious competitor for NTT and KDDI, which both have succeeded to transform themselves from former monopolies into some of the world’s most advanced telecom operators.

In a sense Softbank is already where DoCoMo and KDDI are working very hard to get to: DoCoMo and KDDI are working hard to build content and transaction businesses (such as shopping, financial services, auctions and music), because pure traffic revenue (ARPU) is driven down by relentless competition.

Softbank is strongly linked to YAHOO-Japan, and YAHOO-Japan demonstrated it’s strength by driving eBay out of Japan – so Softbank is already where DoCoMo and KDDI want to go. All Softbank still needed was a wireless network, and with a Vodafone acquisition, Softbank will have a wireless network much faster than expected.

A Vodafone/Softbank deal will not be a good development for eAccess/eMobile, and eAccess/eMobile is reported to have submitted documents to Japan’s regulatory authorities regarding Softbank’s wireless license. It will be interesting how the regulating government ministry will decide on the regulatory aspects of any Softbank/Vodafone deal. In the past few years Japan’s government has been singularly focused on creating the conditions to make Japan the most advanced IT market in the world, so I think we can
be confident to expect a wise decision – wise for Japan, not necessarily beneficial for particular mobile operators.

What made Vodafone change it’s mind about Japan?

As reported by Bloomberg, one year ago Vodafone had the clear intention to remain in Japan for the next 10, 20, 30 years. What made Vodafone change it’s mind?

As widely reported, Vodafone was loosing market share in Japan’s mobile phone market over the last several years.

With number portability being introduced in Japan from autumn 2006, and with three new operators entering the market during 2006-2007, the competitive environment will become much more severe than it is now, decreasing pure network profitability, while at the same time massive network investments are necessary.

Analysis of Vodafone-Japan’s subscriber numbers shows that early warning signs appeared already in 2002 – 2002 would have been the time for Vodafone to take decisive action to turn the business around in Japan.

See also: my comments in Der Standard (German language) “Aus fuer Vodafone in Japan”

UPI also quotes us: “Globe Talk: Vodafone’s sayonara problems”

Japan telecommunications industry market report

Copyright 1997-2013 Eurotechnology Japan KK All Rights Reserved

[Q1] How will SANYO benefit from this, since they are the ones who have the technology, what do they hope to gain from working with Nokia? Or is this merely a way to reduce costs for the company, since it’s struggling to remain profitable?

It is clear to me that NOKIA will benefit, since NOKIA needs 3G know-how from Japan because all markets where NOKIA is dominating are behind compared to Japan in 3G development, and also NOKIA needs a lot of other advanced technology from SANYO.

Of course who benefits depends both on the contract conditions and the relative strengths of the parties.

It’s clear that financially NOKIA is the much stronger of the two. NOKIA is financially very strong, while SANYO is in a very weak position, so it’s a very clever move for NOKIA.

[Q2] Is it already too late for Nokia to make such a move in the CDMA 2000 market, with strong players like Samsung, LG and Motorola already entrenched in the market?

I don’t think it’s too late – both Motorola and NOKIA demonstrated rebounds recently with new design initiatives such as Motorola’s RAZR and NOKIA did a successsful turn-round by introducing clam-shell phones a trend which NOKIA had missed by not being linked sufficiently into Japan before.

To succeed you need to make spectactular phones which match consumer needs, and you need the financial and manufacturing power as well as the brand. The combination of SANYO‘s technology with NOKIA’s financial strength and brand, as well as NOKIA’s efficient supply chain are a good basis.

[Q3] When would you expect to see the benefits of such a move to emerge?

I think one should not underestimate the cultural risks. NOKIA and SANYO have extremely different corporate cultures, and we have seen many cases where corporate cultures lead to great difficulties.

I think the key will be to manage the difference in corporate cultures of two very proud companies. Locating the JV in the USA might help.

SONY-Ericsson has demonstrated that such a JV can be successful. In the case of SONY-Ericsson it has taken several years for the JV to succeed. If one takes SONY-Ericsson as a measure, then it might take a couple of years (3-4 years) for this JV to succeed. If it’s faster than that it will be a positive surprise.

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Textiles business moves to Asia

On 17 November 2005, Lanxess (Köln, Germany) and Asahi Kasei Fibers Corporation (Osaka, Japan) announced the planned sale of Lanxess’ Dorlastan business to Asahi Kasei Fibers Corporation.

Lanxess’ Dorlastan division includes production sites at Dormagen, Germany, and in Bushy Park, South Carolina, USA:

• Dormagen (Germany): currently 280 employees, 170 to be transferred to Asahi Kasei Fibers Corp.
• Bushy Park (South Carolina, USA): currently 190 employees, 160 to be transferred to Asahi Kasei Fibers Corp.

Lanxess

Lanxess was founded in 2004 as a spin-out from Germany’s chemical giant Bayer, and includes some of Bayer’s former chemicals and polymers divisions.

Lanxess focuses on manufacturing and marketing plastics, rubber, intermediates and speciality chemicals.

Copyright·©2005-2016 ·Eurotechnology Japan KK·All Rights Reserved·

Here is Art Director Mr Kawagoi, who created the famous SonyEricsson logo, explaining the messages contained in his creation:

Here Swedish Managers of the SonyEricsson Creative Design Center from Lund/Sweden:

My conclusion: expect a lot more great designs out of SonyEricsson. Also, there is every indication it’s a very successful Japan-Swedish cooperation.

[images in this post are taken with a DoCoMo/Sharp SH900i 3G/FOMA camera-phone in 2Megapixel setting, and sent through the air via DoCoMo’s FOMA network. Images are reproduced here in much less than the original 1224 x 1632 pixel size, which would not fit on most PC screens.]

Copyright·©1997-2013 ·Eurotechnology Japan KK·All Rights Reserved·

I did not follow Cable and Wireless recently in Japan, but it seems that C&W made a loss of YEN 61.6 OKU on sales of YEN 713 OKU, i.e. almost 10% loss.

Spent all morning discussing with one of the innovation managers of a big European telco. Interesting. Spent afternoon with a US bio-tech company which which is thinking of asking us to build their business in Japan, and in the evening listened to a talk by Tadashi Onodera, the CEO of KDDI. Expected him to talk mainly about mobile – but he did not. His focus was a national VOIP network they are building, attacking the fixed line income of NTT. Got hold of him after his talk and discussed with him for about 10 minutes.

UPDATE: on October 26, 2004, Softbank announced the acquisition of Cable & Wireless IDC. Total cost of the acquistion is announced as YEN 12.3 billion (= US$ 110 million)

Copyright (c) 1997-2013 Eurotechnology Japan KK All Rights Reserved

“Vodafone- Not so big in Japan” (The Economist, Sept 30th, 2004)

Japan telecommunications industry market report

Copyright 1997-2013 Eurotechnology Japan KK All Rights Reserved

by Gerhard Fasol

Toshiba Elevators sends one Director to KONE’s Board, and KONE sends two Directors to Toshiba Elevator’s Board

On December 20, 2001, Toshiba Elevator and KONE announced, that in March 2002,:

• TELC will issue new shares and increase its capital, and KONE will acquire a 20% holding of the new capitalization
• TELC will acquire 5% of KONE’s shares
• TELC will nominate one Director to the Board of Directors of KONE
• KONE will nominate two Directors to the Board of Directors of TELC

Toshiba Elevator and Building Systems Corporation (TELC)

Toshiba Elevator and Building Systems Corporation (TELC) is a subsidiary of Japan’s Toshiba Corporation, established on February 16, 1967, the first escalator was installed in 1966, and the first elevator in 1967.

Toshiba Elevators produces advanced elevators, such as double decker elevators.

TELC has sales of approx. YEN 120 billion (US$ 1.2 billion) per year, and employs about 4700 people.

KONE

KONE was founded in 1910. KONE’s annual sales are on the order of EURO 7 billion, and KONE employs about 47,000 people. KONE’s shares are listed on NASDAQ OMX Helsinki Exchange.

Japan electronics industries – mono zukuri.

Copyright (c) 2009-2015 Eurotechnology Japan KK All Rights Reserved

In 1971-1972 Yamaha Motor Group and Mitsui Group establish Yamaha Motor Deutschland GmbH in Germany and Yamaha Motor (UK) Limited in UK to import, market and sell Yamaha motor products in UK and Germany:

• Yamaha Motor Deutschland GmbH:
  • Yamaha Motor Group: 40% investment
  • Mitsui Group: 60% investment
• Yamaha Motor (UK) Limited
  • Yamaha Motor Group: 25% investment
  • Mitsui Group: 75% investment

Expansion to Austria, Hungary, Czech Republic, and Poland

Subsequently Yamaha Motors and Mitsui expand imports, marketing and sales in Europe:

• Yamaha Motor Austria GmbH: 100% Yamaha investment
• Yamaha Motor Hungary Kft: 100% Yamaha investment
• Yamaha Motor Czech Spol. s.r.o.: 100% Yamaha investment
• Mitsui Motor Polska Sp. z.o.o.: 100% Mitsui Group investment

(c) 2019 Eurotechology Japan KK