KKR is a front runner in Nissan’s 90 billion yen headquarters sale
The New York-based firm has been expanding its business in Japan, especially in private equity and real estate deals
[TOKYO] KKR has emerged as the lead bidder to buy Nissan Motor’s global headquarters, according to sources familiar with the matter, as the embattled carmaker sells off assets to shore up its finances.
KJR Management (KJRM), a Japanese real estate unit of KKR, offered around 90 billion yen (S$785 million) for the 22-storey office building, the highest bid among several submitted by investment firms, the sources said, requesting not to be named because the information is private.
KKR and KJRM are considering ways to raise money to finance the potential transaction, and the deal includes leasing the office back to Nissan for 10 years, the sources said. Discussions are ongoing and the parties involved may decide against proceeding with a deal, they added.
Nissan and KKR representatives declined to comment.
New York-based KKR has been expanding its business in Japan, especially in private equity and real estate deals. Co-chief executive officer Joseph Bae said last year that Japan was the firm’s most active market outside of the US for investment. Earlier this year, KKR sealed a US$4.4 billion deal to take Japanese tech company Fuji Soft private.
Nissan’s headquarters are in the central business district of Yokohama, a port city south of Tokyo that makes up the greater metropolitan area of the Japanese capital.
The carmaker has been grappling with an ageing vehicle line-up amid intensifying competition from China’s rapidly expanding electric vehicle sector. Nissan also faces US$5.6 billion in debt obligations due next year.
The company forecast 180 billion yen in operating losses for the April-to-September period. It is still in the early stages of a turnaround plan that will see it cut 20,000 jobs and reduce manufacturing sites from 17 to 10. It also faces headwinds from US President Donald Trump’s trade war, with a forecast 300 billion yen hit from duties.
“Nissan’s challenge is to restore profitability through bold and comprehensive restructuring,” Bloomberg Intelligence senior auto analyst Tatsuo Yoshida said on Thursday (Aug 21). “Priorities include optimising production capacity and workforce levels, cutting excess inventory and revitalising underperforming operations in China.” BLOOMBERG
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