Japan's Daiwa to step up hunt for bankers, capitalising on M&A slump

Daiwa Securities

21/12/2023 15:00

By Makiko Yamazaki and Ritsuko Shimizu
       TOKYO, Dec 22 (Reuters) - Daiwa Securities Group
 8601.T  plans to go on an offensive to hire M&A bankers as a
global dealmaking lull allows the major Japanese investment bank
to tap top-notch talent, its CEO said.
    "Now is our chance, as the M&A (merger and acquisition)
market remains battered and many talented bankers have been up
for a hunt," Seiji Nakata, CEO of Japan's second-largest
brokerage and investment bank, told Reuters in an interview.
    Daiwa has set a target of increasing M&A revenue by 50% to
at least 70 billion yen ($489.85 million) and the number of M&A
bankers to 900 over the next eight years from nearly 700 now.
    Globally, companies notched $2.6 trillion of deals by the
end of November, putting volume on track for the lowest
full-year total since 2014 and well below 2021's $5.7 trillion
peak.
    "I expect a recovery in the global M&A market around the
middle of next year when interest rates start to fall to create
a favourable financing environment," Nakata said. "Our chance
will stay for another year or a year and a half."
    The M&A market will not shrink in the long term as M&A is an
indispensable tool for companies to grow their core businesses,
Nakata said, citing Nippon Steel's  5401.T  proposed $14.9
purchase of U.S. Steel  X.N .
    Daiwa announced last month it bought Dublin-based boutique
M&A advisory firm IBI Corporate Finance. Other Japanese
financial institutions have also bolstered their M&A
capabilities recently.
    Mizuho Financial Group  8411.T  bought U.S. boutique firm
Greenhill for $550 million this year, while Sumitomo Mitsui
Financial Group  8316.T  is boosting its stake in Jefferies
Financial Group  JEF.N .
    In China, Daiwa has seen demand for advising deals where
Japanese companies restructure their local businesses or
withdraw from them, Nakata said.
    He also said Daiwa's majority-owned Chinese joint venture
has been building a track record in cross-border deals as well
as initial public offerings.
    "We want to firmly establish our presence in cross-border
deals by leveraging our global networks," he added.
($1 = 142.9000 yen)

 (Reporting by Makiko Yamazaki; Editing by Muralikumar
Anantharaman)
 ((Makiko.Yamazaki@thomsonreuters.com; +81-3-4563-2805;))