(Bloomberg) -- Citigroup Inc. is looking to rejoin the top 10 advisers this year for Japan-related mergers and acquisitions, an executive said, amid growing queries from overseas clients keen on buying Japanese businesses.
“Discussions on large-scale transactions have clearly increased,” with their value ranging from several hundred billion yen to above ¥1 trillion ($6.9 billion), Masuo Fukuda, the Wall Street lender’s head of investment banking in Tokyo, said in an interview.
“The trend may have changed” thanks partly to the introduction last year of government guidelines instructing firms to seriously consider takeover offers, he said.
Last year, the bank won an advisory role for Nippon Steel Corp.’s planned acquisition of United States Steel Corp. in a deal valued at $14.1 billion. Citigroup is also among financial advisers handling an $8 billion deal this year that involves Robert Bosch GmbH planning to buy Johnson Controls International Plc’s heating and ventilation assets.
The volume of deals involving Japanese firms this year has climbed 7% from a year earlier to $144.1 billion, set for the highest in three years, according to data compiled by Bloomberg.
More deals are likely on the horizon given Alimentation Couche-Tard Inc.’s takeover proposal for Seven & i Holdings Co.. Couche-Tard was said to be considering improving its $39 billion offer that the Japanese convenience store operator had rejected.
The Nippon Steel role helped lift Citigroup to 12th place for Japan-related merger advisory deal-making last year, up from 14th in 2022, according to data compiled by Bloomberg. It’s now at 11th and the last time Citigroup was in the top 10 was in 2021.
Citigroup’s Japan team also wants to add investment bankers, Fukuda said, without giving details.
The prospect of receiving merger proposals from both domestic and overseas companies as well as calls from activist investors for corporate changes has spurred a “growing sense of urgency” among Japanese companies to better manage their operations, said Yoshinobu Agu, head of M&A at the bank’s securities subsidiary in Japan.
Citigroup is willing to act as adviser for buyers placing unsolicited bids, Agu said. “We surely want to work for aggressive acquisition proposals if they have a good cause,” he added.
--With assistance from Manuel Baigorri.
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