Trump's Policy Shift Could Fuel Japanese Outbound M&A Activity, Citi Executive Says

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Japanese companies are expected to find it easier to secure approval for U.S. acquisitions under the incoming Trump administration, according to Masuo Fukuda, vice chairman of Citigroup in Japan.

Despite Trump’s opposition to Nippon Steel’s attempt to acquire U.S. Steel, which faces antitrust and national security reviews, Fukuda believes the overall regulatory environment will relax, creating more opportunities for Japanese firms to pursue acquisitions. 

Citi anticipates a rise in inquiries for outbound M&A from Japan, as a potential shift in U.S. merger review guidelines under Trump could benefit Japanese companies. Many U.S. firms had previously adhered closely to the Federal Trade Commission’s stringent rules, but Trump’s approach could ease these restrictions, creating opportunities for Japanese firms. 

Fukuda and Yoshinobu Agu, Citi’s head of M&A, also see continued growth in Japan’s inbound M&A market, which reached a record $82 billion as of November, despite a global slump in deal-making. Japanese M&A guidelines introduced last year, along with heightened expectations of capital efficiency among institutional investors, are expected to drive more mergers and acquisitions in the years to come.

Japanese companies, historically known for holding excess assets, will likely reorganize their portfolios to increase shareholder value, creating more attractive acquisition targets.

Paraphrasing text from "Reuters" all rights reserved by the original author.