Xu Mingyin, head of Goldman Sachs Asia direct investments, said on Thursday that
corporate acquisitions and private equity activity in Japan remain at an early stage
stage and that the equity market is well positioned for consolidation. She named
Japan, South Korea and Australia as the most profitable Asian markets for M&A
and privatizations given stable economies and large corporations. Foreign private
equity activity in Japan has risen over the past three years, driven by
corporate governance reforms that are increasing pressure on companies and
boards to lift investor returns. Xu noted Japan has about 4,000 listed companies
versus roughly 5,000 in the US, even though the US economy is about six times
larger; Germany has only about 400 listed firms. She added that more than 1,000
Japanese companies report annual revenue above US$1bn, making them attractive
targets, and that Japan is still at an early stage in any process of trimming
excess listings.
