Japanese merger delays linked to Chinese regulators

AFP-JIJI

Sony and Olympus said Friday their medical device merger has been delayed until next year, with reports and some firms saying it has become the latest corporate marriage to be held up by Chinese regulators.

Firms in Japan, which is embroiled in a territorial row with Beijing over tiny islets near Taiwan, have launched a string of mergers and acquisitions, including the $20 billion Softbank takeover of Sprint Nextel in the United States.

But some are experiencing delays in closing the deals and blaming it on China’s antitrust regulators.

Home builder Daiwa House Industry said it is delaying its ¥50 billion ($595 million) purchase of contractor Fujita. The share transfer, which was scheduled for Thursday, was pushed back “because procedures under Chinese competition law remain in effect,” Daiwa House said in a statement.

Transactions that encompass operations in more than one country often require competition regulators in different nations to sign off on the deals.

Electronics giant Sony and camera and medical equipment maker Olympus, which are planning a joint venture to develop endoscopes, said Friday the launch of their new company will be delayed until next year “because procedures in some of the countries are taking longer than expected”.

An Olympus spokesman declined to comment further, but Dow Jones Newswires reported that a person with knowledge of the matter said the pair are awaiting antitrust approval from China and an eastern European country.

Other deals awaiting the green light from Chinese regulators reportedly include ad giant Dentsu’s planned $5 billion purchase of Britain-based Aegis Group and Marubeni’s $3.6 billion acquisition of U.S. grain giant Gavilon Group.

Dentsu said it has received approval from seven countries including Australia, Germany and the United States, with China the lone holdout.

Sino-Japanese tensions flared in September when Tokyo nationalized some of the uninhabited Senkaku Islands in the East China Sea to prevent the Tokyo Metropolitan Government from buying them, sparking protests and boycotts of Japanese goods across China. The isles are also claimed by China, which calls them Diaoyu, and by Taiwan, which calls them Tiaoyutai.

But experts said that China is often slower than other countries in clearing antitrust applications and that it’s uncertain whether the holdups are intentional.

The value of overseas deals involving Japanese firms has topped $110 billion so far this year, according to data provider Dealogic. The shopping spree is being driven by the strong yen and a limp domestic market.