Foreign businesses looking to take over Japanese firms should show patience and be prepared to learn from their newly acquired companies, according to a British academic and former banker with experience working in Japan.
George Olcott says lessons can be learned from a series of successful and disastrous foreign acquisitions of Japanese firms in the late 1990s.
And the academic believes that despite a slowdown in the number of foreign mergers and acquisitions of Japanese firms, the pharmaceutical, automotive and food sectors face "significant" problems of scale and are vulnerable to foreign takeover.
Olcott, a senior fellow at the Judge Business School at Cambridge University, says foreign buyers must understand the needs of Japanese consumers and be prepared to learn from their new Japanese staff if acquisitions. Olcott, who studied five acquisitions in depth for his new book, "Conflict and Change: Foreign Ownership and the Japanese Firm," said Renault's tieup with Nissan Motor Co. worked well because the French automaker recognized Nissan's core strengths, particularly in engineering and manufacturing, and showed a willingness to learn.