Gerhard Fasol.

Category: M&A

  • Japan’s electronics conglomerates: Whats the difference between Apple/IBM vs Sony/Panasonic/NEC?

    Japan’s electronics conglomerates: Whats the difference between Apple/IBM vs Sony/Panasonic/NEC?

    Why are Apple/IBM/Microsoft/Google so very different compared to SONY/Panasonic/NEC

    Need for corporate governance reforms in Japan

    Japan's electronics conglomerates: Whats the difference between Apple/IBM vs Sony/Panasonic/NEC?
    Japan’s electronics conglomerates: Whats the difference between Apple/IBM vs Sony/Panasonic/NEC?

    My friend’s question: Why are Apple/IBM/Microsoft/Google so very different compared to SONY/Panasonic/NEC

    Gerhard Fasol’s answer: Profit and growth. Apple and IBM grow and are highly profitable. Sony, Panosonic and NEC have no growth and no profit for 15 years – read here:
    http://www.eurotechnology.com/2013/05/20/japans-big-8-electronics-giants-fy2012-results-announced/
    for more detailed analysis, read our Report on Japan’s electronics sector

    My friend’s question: Gerhard, we know about the difference in profitability and growth. The question is, what made such a difference in profitability and growth

    Gerhard Fasol’s answer: there are many down-stream issues, e.g. acquisition of cloud startups, execution etc. Much of this is summarized in an excellent talk by Masamoto Yashiro, which I have written up here: http://www.fasol.com/2013/10/19/masamoto-yashiro/

    There are:

    1. superficial reasons, like YEN-rate, interest rate, global recession etc
    2. execution and management issues, the kind of stuff you learn at Business Schools
    3. the big underlying issues

    the big underlying issues are brains (=hardware) and education (=operating system and software for those brains).

    There are many fantastic Japanese companies. In a free market, its no surprise that companies are born and others die. Its called Schumpeter’s creative destruction. In a way its more surprising that companies can survive so long with a long-dead business model.

    Have you heard about the German company AEG? AEG built the electricity system for Tokyo a long time ago – thats why Tokyo has 50Hz and Osaka has 60Hz. AEG disappeared about 30-40 years ago. There are still some companies today licensing the AEG brand, which is still famous, however, the traditional AEG company disappeared with bankruptcy in 1980. You can read about this here: http://www.csmonitor.com/1982/0812/081250.html

    it says:
    “Plagued by bad management throughout the 1970s, West Germany’s 10th largest employer overextended itself and became involved in too many loss-making enterprises. It invested heavily in the wrong kind of nuclear technology and its domestic appliances business fell prey to growing competition in a stagnant market.
    In the last four years, it posted operating losses of 4 billion marks ($1.6 billion) and despite massive injections of credit from the banks in 1979 and again last year, it did not recover. Mr. Duerr partly blames the worldwide recession and high interest rates for the failure.”

    Sounds familiar? thats AEG in 1980.

    Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

  • Four critical factors for Japanese corporates making major international acquisitions, Stuart Chambers, CEO of NSG Group

    Four critical factors for Japanese corporates making major international acquisitions, Stuart Chambers, CEO of NSG Group

    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.

    Stuart Chambers, CEO of NSG Group
    Stuart Chambers, CEO of NSG Group

    Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

  • A German perspective on M&A in Japan

    German Embassy in Tokyo

    April 24th, 2008

    Title: A German Perspective on M&A in Japan

    • The background, the drivers:
      • High Euro, low valuations in Japan
      • Globalization, must have critical size
      • Technology
      • Europe’s business is under-developed in Japan
    • The Landscape:
      • M&A is generally at lower levels than in UK/US
      • recently M&A transactions are rising:
    • Types of M&A:
      • strategic vs financial
      • friendly vs hostile
    • M&A: the process
      • Finding the target: “why should I pay for that?”
      • The deal: in Japan money often not always win!
      • Due diligence: often overlooked in Japan – especially by foreign companies!
      • Post-merger: culture is really difficult, must do your homework to succeed!

  • M&A in Japan

    Talk and panel discussion at the Daiwa Anglo-Japanese Foundation

    Practical aspects of mergers and acquisitions between Europe and Japan

    Gave a panel talk organized by the Asia Pacific Technology Network at the beautiful House of the Daiwa Anglo-Japanese Foundation near Regents Park in London on the topic “M&A in Japan” on April 18th, 2008.

    Summary:

    • The background, the drivers:
      • High Euro, low valuations in Japan
      • Globalization, must have critical size
      • Technology
    • The Landscape: M&A is generally at lower levels than in UK/US, however recently M&A transactions are rising:
      • 1985-1993: 500 deals/year Buyout Funds: 1 – US$ 30 Million
      • 2000-2003: 1700 deals/year
      • 2005-2007: 2700 deals/year Buyout funds: 22 – US$ 5.6 Billion
    • Types of M&A:
      • strategic vs financial
      • Hostile vs friendly
    • M&A: the process
      • The deal: in Japan money does not always win!
      • Due diligence: often overlooked in Japan (with example from our experience)
      • Post-merger: culture is really difficult, must do your homework to succeed! Lets discuss the pitfalls, e.g. lets learn from the Vodafone case!

    Speakers:

    Dr Gerhard Fasol, President, Eurotechnology Japan KK
    David Syrad, Managing Director/Managing Director Asia, A.K.I. Japan Limited/Change Masters International Limited
    Seminar Description

    Two practitioners from Tokyo will debate the changes in Japanese attitudes to mergers and acquisitions. Gerhard Fasol is the leading expert of Japan’s electronics and telecoms sectors, while David Syrad is a consultant specializing on M&As, with particular reference to the automotive sector.

    During the course of this seminar, we will cover:

    DR GERHARD FASOL: BACKGROUND

    Gerhard has been working with the Japanese telecoms industry since 1984. Over 1996/7, he created Eurotechnology Japan KK, which has become one of the leading western technology and M&A advisory boutique in Japan, focussing on the Japanese ICT sector. In recent years, Eurotechnology’s work has included advising a global financial institution on the risks of the US$ 15 billion loan to SoftBank for the Vodafone KK acquisition, helping a French company to acquire a Japanese pharmaceutical factory, analyzing industry sectors and companies for global investment banks, and working with a financial institution on mobile banking sites, including business development, technology and security.

    Eurotechnology was also recently engaged by the European Union to benchmark Japan’s mobile and fixed-line communication industries vs EU, and to make recommendations to the European Union how to learn from Japan.

    In addition, his company constantly works on business development projects between Europe and Japan – several of which Eurotechnology drives on it’s own initiative, helping Japanese companies grow business in Europe, and helping European companies build and grow their businesses in Japan.

    DAVID SYRAD: BACKGROUND

    Managing Director/Managing Director Asia, A.K.I. Japan Limited/Change Masters International Limited. David is responsible for strategy, business development and personnel. Also active as a consultant.AKI is a long-standing market entry and communication-related consultancy. Projects handled include: Automotive, Medical Equipment, ICT, IT, Nuclear Power, Office Automation, Food and Beverages, Sports Goods, Education and Tourism

    Change Masters International is a UK-based, global Strategy Implementation Consultancy – latest Japan project led to client’s induction into the Balanced Scorecard Hall of Fame.

    Location: Daiwa Foundation Japan House, 13/14 Cornwall Terrace, London, NW1 4QP (www.dajf.org.uk/location)
    Nearest tube station: Baker Street
    Timing: Sandwiches 12.30: Seminar 13.00 – 14.30.
    Pricing: Free
    To Register: please send your details (name, institutional affiliation, email address, phone number) to biz@aptn.org
    Contact: Louis Turner 0790 5204 677

    See: http://www.aptn.org.uk/20082Q/80418M&ATokyo.html

  • A European perspective on M&A in Japan

    Presentation at the lunch meeting of the Danish Chamber of Commerce in Japan (DCCJ) on April 4, 2008.

    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·

  • Trends in high technology in Japan (EU mission on foreign direct investment in Japan)

    The EU-Japan Center for Industrial Cooperation held a 5-day intensive course in Japan for executives from EU firms between Monday 19th February – Friday 23rd February, 2007 on foreign direct investment in Japan.

    On Monday 19th February I gave a talk “Trends in high technology in Japan”, covering the following points:

  • “New Opportunities versus Old Mistakes: European Companies in Japan’s High-Tech World”

    Gerhard Fasol gave a talk at the EU-Japan Center for Industrial Cooperation (Tokyo) on
    Thursday, June 22nd, 2000, 14:00-16:00, and
    Thursday, December 7th, 2000, 14:00-16:00

    Topic: “New Opportunities versus Old Mistakes: European Companies in Japan’s High-Tech World”

    (Audience: 70 Presidents, VPs, and managers of Japan subsidiaries of European Companies and Banks.)

  • Trends, Opportunities and Change in Japan’s High-Tech World

    Gerhard Fasol gave a talk at the French Embassy in Tokyo on Tuesday, September 28, 1999 at 18:30pm.

    Topic: “Trends, Opportunities and Change in Japan’s High-Tech World” (in French language)

    Purpose: Executive Education for management of French Subsidiaries in Japan

    Participants: Executives of French subsidiary companies in Japan

  • “New Business Opportunities in Japan – the world’s second largest market”

    Gerhard Fasol gave a talk at the Rotary Club Stuttgart-Solitude on Monday, September 6th, 1999, 18:30pm

    Topic: “New Business Opportunities in Japan – the world’s second largest market”

    (Audience: CEOs, Managers, VPs, of Stuttgart area companies)