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Nomura seeks M&A bankers as Japan deals surge
[TOKYO] Nomura Holdings is hiring bankers for its mergers and acquisitions (M&A) business in Japan as a sharp rebound in domestic deal-making vaults the nation's biggest securities firm to the top ranks of global advisers.
"We're recruiting people more eagerly than usual," said global M&A head Shinsuke Tsunoda. Consultations on local deals are up about 30 per cent to 40 per cent from a normal year, with clients seeking advice on "every kind of transaction" during the pandemic, he said.
Japan has driven a global revival in M&A activity in recent months, as the economy shows early signs of a recovery and companies look to reshape themselves for life after the coronavirus. Nomura has worked on mammoth deals including the US$40 billion NTT Docomo buyout, putting it on course to end the year among the world's top 10 advisers for the first time, data compiled by Bloomberg shows.
While Mr Tsunoda said there is no numerical target for hiring, Nomura has recently published advertisements seeking M&A bankers in Tokyo, Osaka and Nagoya.
A jump in demand for advice since August probably reflects clients' decisions to act on plans they developed after the pandemic took hold, Mr Tsunoda said. Companies are seeking input on everything from divestitures to the purchase of competitors to mergers designed to enter different industries, he said.
"We're at the start of an era" similar to the aftermath of the global financial crisis, Mr Tsunoda said. "Be it a post or with-coronavirus era, things will change - there should be more industrial reorganisation and cross-border transactions."
Mergers involving Japanese companies have jumped 59 per cent this year to US$247 billion, according to data compiled by Bloomberg. Nomura is the top adviser on Japan transactions, retaining its lead over Morgan Stanley's venture with Mitsubishi UFJ Financial Group, the data shows.
Tokyo-based Nomura worked with Seven & i Holdings on its US$21 billion deal to buy Marathon Petroleum's petrol-station business, and Nippon Paint Holdings on its US$12 billion tie-up with Singapore billionaire Goh Cheng Liang's Wuthelam Holdings.
The rush of deals probably helped Nomura's earnings in the three months ended Sept 30, according to Bloomberg Intelligence analyst Shin Tamura. "Revenue may improve dramatically", driven by fixed-income trading and investment banking, Mr Tamura wrote in a note. Nomura is scheduled to report fiscal second-quarter results on Wednesday.
With coronavirus cases much lower in Japan than Europe and the US, Nomura has been doing deals through a blend of in-person and virtual contact. "Our customers and our team have avoided meeting face to face when there's no good reason to, which has helped to boost efficiency," Mr Tsunoda said.
Meeting in person remains effective when "we need to generate impact in a very difficult situation" to propel deal-making, he said. Clients favor such talks when they are about to conclude agreements or if further price negotiations are needed, he added.
"Some clients have a deep-rooted preference for face-to-face conversations," Mr Tsunoda said. "Just like us, they want to make sure their counterparts understand their thoughts and concerns."