When Internet services company Livedoor Co. announced its bid to acquire Nippon Broadcasting System Inc., the vulnerabilities of Japan's capital markets were suddenly laid bare, prompting domestic companies to scramble for ways to defend themselves from hostile takeovers.
Two of the nation's major oil wholesalers, for example, Nippon Oil Corp. and Cosmo Oil Co., have begun buying more shares in each other, following similar moves by major steel companies Nippon Steel Corp., Sumitomo Metal Industries Ltd. and Kobe Steel Ltd.
Cross-shareholding has long been seen as a symbol of the cozy ties shared by Japanese businesses and as a major factor behind the prolonged stagnancy of Japan's economy. But the Livedoor-Nippon Broadcasting saga seems to have breathed new life into the hitherto declining practice.