Low interest rates and a confident financial services industry are likely to result in more Japanese companies investing in Australia, according to one M&A partner.
Baker & McKenzie’s Australian coordinator for Japanese investment and M&A partner, Richard Lustig, expects to see a greater number of Japanese inbound investments in the coming year. “I’m expecting to see an increased level of investment activity out of Japan both in terms of volume and value,” he told ALB. “There are a number of factors at play as to why this is, but more generally we see low interest rates in Japan, and the large trading houses being very supportive of Japanese companies spreading their wings overseas.”
Lustig recently acted for Japanese packaging company Daiwa Can Company on its investment in Barokes Wines. Daiwa Can Company is the global leader in the development of aluminium bottle can technology; while Barokes produces a range of wines and is a leader in the field of wine in a can technology.
Lustig said that the transaction demonstrated the keen interest which Japanese companies have in Australian businesses where there are strong synergistic benefits. “We are seeing a good deal of interest in Australia from our Tokyo counterparts,” he said. “The main focus for Japanese investors, when looking at an investment, is quality, not price. They are looking for a quality product that will endure. The cost of the asset and the ongoing operations of the assets might impact on what price they are willing to pay, but the synergy the asset has with the business and the quality will play a bigger role in them considering the investment than price.”
He added that the ongoing need amongst Australian companies for overseas investment would also contribute to the continued activity.