Japanese firms shop abroad
Armed with a strong yen
Why Japan Inc has been going on a foreign spree
MR TICKLE and Mr Bump are leaping into bed with Hello Kitty.
Sanrio, the owner of the bow-adorned feline, said on December 6th that it had acquired the Mr Men franchise from Chorion of Britain.
The deal, for an estimated 3 billion,brings the Japanese design and licensing firm 86 playful characters who have delighted toddlers in 30 countries and shifted 100m books.
Corporate Japan is on an overseas shopping spree.
Japanese firms spent a record $80 billion on some 620 foreign companies in 2011, according to Dealogic, a firm that measures such things, exceeding the previous record of 466 deals worth $75 billion in 2008.
When Japan Inc went shopping abroad in the 1980s, it was a sign of strength.
Japanese companies were spreading their wings because they were growing. This time, it is a symptom of weakness.
The past year in Japan has been wretched.
An earthquake and tsunami in March wrecked factories and disrupted supply chains, creating shortages of all sorts of crucial components. Radiation fears hurt exports.
A strong yen walloped profits.
Floods in Thailand interrupted the distribution of electronics and car parts.
Corporate-governance scandals cast a black cloud over blue suits nationwide.
The Japanese population is ageing and shrinking.
The economy is sluggish. Consumption is lacklustre.
So Japanese firms find it nearly impossible to expand domestically.
At the same time, thanks to crises elsewhere in the rich world, the yen is extraordinarily strong.
It has appreciated by 45% against the dollar in the past four years.
And having learned thrift during their own banking crisis a decade ago, Japanese firms are flush:
big listed companies are sitting on a cash pile of ￥60 trillion.
With all this buying power and few opportunities at home, it is hardly surprising that Japanese firms are snapping up foreign companies, especially in fast-growing emerging economies.
Unless we grow we're not able to stay alive simply by staying in Japan,
explains Tadashi Yanai, the boss of Uniqlo's Fast Retailing, a big clothing firm.
The time is ripe for foreign deals, he chirps.
The economic crises in America and Europe have pummelled share prices, making companies cheaper to acquire.
Back in the 1980s Japanese firms hunted trophies such as golf courses and film studios.
Now they are taking a more pragmatic approach, buying solid firms in fast-growing markets and filling gaps in their product lines.
For example, Kirin, a big Japanese brewer, is acquiring a majority stake in Schincariol, a Brazilian one, for $2.6 billion.
The Japanese beer market is flat; Brazil's is growing by 10% a year.
The biggest deal of the year was when Takeda, a Japanese drug firm, bought Nycomed, a Swiss one, for 1 trillion.
Almost 40% of Nycomed's sales are in emerging markets.
Japanese trading houses are hungrily buying energy projects, especially those involving shale gas.
This year they spent $10 billion, up from less than $3 billion in 2010.
The pace of such deals accelerated after Japanese nuclear-power plants were suspended following the nuclear accident at Fukushima in March,
which made many Japanese worry about their energy supply.
Toshiba spent $1.6 billion on Landis+Gyr, which makes smart electricity meters for homes.
Sony paid $8.4 billion for control of its cellphone venture, Sony Ericsson, a stake in the record label EMI and other stuff.
This time really is different
In the past, Japanese firms would parachute in bosses from Tokyo to run the show.
Many were monocultural and mediocre.
Now, Japanese firms wisely rely on local talent.
Many of the new generation of Japanese executives have lived and worked abroad,
notes Shinsuke Tsunoda, the head of mergers and acquisitions in Japan at Nomura, a Japanese securities house.
This means they are more comfortable doing deals with foreigners, and they are better at integrating the foreign firms they buy with their new Japanese owners.
The foreign shopping spree is internationalising Japanese industry by the back door.
Japan Inc is acting like a massive sovereign-wealth fund, placing its money abroad to earn investment income at home.
When old people retire, they tend to live off their savings.
They supply capital to younger, sprightlier, cash-strapped folk, who put it to work and pay dividends or interest to the retirees.
That is, roughly speaking, what Asia's ageing archipelago is starting to do.