China M&A Ripe Targets for Japanese Insurers after a big overseas push
Japan is eyeing an 'acquisition splurge' of Chinese properties among various foreign investors searching for Chinese assets in 2019. Bloomberg reported that JPMorgan, which had been monitoring the Chinese property situation closely, saw that Japan could chase after these assets and make them a part of 'the biggest year ever' for their real estate acquisition strategy.
Japan isn't only eyeing Chinese properties. Japan finally overtook China, as the latter is focused on domestic spending first than anything else. Japan created mergers and acquisitions that brought in $890 billion in cash. For the rest of 2019, Japanese companies are looking to continue what it began in 2018, where it created a $191 billion profit in offshore acquisitions. Chief among these was the record-making takeover of Shire Plc by Takeda Pharmaceutical Co.
Japanese businesses are fuelled by their shrinking population, as well as a dormant local economy. The US' trade dispute isn't helping things as well. While the rest of Asia is reeling from the fallout, Japan has been proactive on the trading end. They have managed to create a 'safe haven' for the yen, boosted by stimulus packages from Japan firms Toshiba Corp., SoftBank Group Corp., and other similar institutions.
On the foreign scene, Japan has certainly been busy. Buoyed by the confidence that their economy will do just fine, it had been collecting assets from different countries. From Australia to the United States, Business Times pointed out, Japan had been creating a 'war chest' of assets to help ease the fallout of the ugly trade disputes that the US tariff impositions had created, both in Asia and in Europe.
In China, Japan struck up M&A deal after deal, which amounted to $6.1 billion last year, a 66 percent hike from 2017. The data, collected from Refinitiv, also showed that Japanese insurers have about $53 billion spent on different deals since 2014, second only to the United States in insurer-backed agreements.
Owing to the Asian economic climate, Japan and China have agreed to look for closer ties in business. China has also explored allowing foreigners to hold majority stakes in most insurance joint ventures in the country. China is creating a pivot towards the Asian power after Washington was found out to be an unwilling partner amid the trade dispute.
The country had said in a statement that it wasn't entirely ruling out transactions in the US. However, based on the outlook of things, most of the transactions are expected to happen in Asia.