Banking, Corporate Finance and M&A, Japan - Monday, December 1, 2008 17:03 - 0 Comments

Japanese banks change their role in world finance

IFR, December 2008

It’s been a while since the world has expected anything positive from Japanese banks, but in the darkest months of 2008 they emerged as unlikely heroes for their counterparts in the west. The cash-rich but inefficient megabanks of Japan, stuffed with deposits that wobbly Wall Street financiers would have killed for as the credit crunch took hold, have clearly been opportunistic and perhaps picked up some bargains. But can we say their role in world finance has changed?

Two transactions have caused the world to look afresh at the positioning of Japanese banks on the global stage. On September 22, Mitsubishi UFJ Financial Group announced it planned to acquire up to 20% of Morgan Stanley’s common stock. By the time the deal was closed on October 13, the terms had changed a touch (to be benefit of MUFG), bringing it 21% of the US bank on a fully diluted basis, but the expenditure remained vast: It will spend $7.8 billion to acquire convertible preferred shares, and $1.2 billion on nonconvertible preferred shares. Continue…

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