Boston, MA 10/02/2013 (wallstreetpr) – In a milestone deal, a Japanese company, Tokyo Electron Ltd. was sold to the world’s largest chip manufacturing company, Applied Materials Inc. (NYSE:AMAT). Japan is well known as a country where selling of a company to an overseas rival is considered a last resort. This deal between the world’s third largest Tokyo Electron Ltd. and the U.S. based Applied Materials is the biggest ever deal as far as the taking over of a Japanese company by a foreign Co. is concerned. For Applied Materials, this would be a $10 billion acquirement, after which it would be a 68% shareholder of the Japanese company. The representation board, however, is to be managed uniformly by the two companies concerned.
Some believe that this may become a trend where Japanese blue chip companies may make themselves available for sell off to foreign ones. In total, $83 billion will be spent by Japanese Companies on acquiring foreign company during the year 2012. Japan is perhaps the country with far lesser acquisitions of foreign companies in the whole of Asia in 2012, according to Datastream data for the last 10 years. As far as inbound deals are concerned Japan has spent a total of $15 billion.
Companies do not take much interest in making sell off deals with Japanese Cos. Because of the perception that Japan is not open to foreign companies, some believe that Japanese companies will not bargain while selling their companies. The Tokyo electron deal will lead to new Japanese companies selling off because of Japanese Prime Minister Shinzo Abe’s policies of opening up the companies’ economic gates to foreign companies .The Prime Minister is trying to revive the economy of the country. While referring to the Tokyo Electron deal Siegel commented that it could be expected that this would lead to a few changes in the present strategies. Managing partner of a law firm, Morrison & Foster, in Tokyo said that private equity funds are taking interest in Japanese companies though materializing of such interests will take some time.
