Japan Inc ticks right boxes with $2 bln share sale

Renesas Electronics

26/01/2024 12:25

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
       SINGAPORE, Jan 26 (Reuters Breakingviews) - After
talking the talk, Japanese companies are now walking the walk.
Just a week after the Tokyo bourse released a list of firms that
have taken steps to improve capital efficiency, Hitachi  6501.T 
and NEC  6701.T  announced plans to sell stakes worth $2.1
billion in chipmaker Renesas Electronics  6723.T . The exit
unwinds a cross-shareholding typical at many large conglomerates
that is seen as a drag on shareholder value.
    The timing couldn’t be better. The sellers are offering a 7%
discount to Renesas’s Jan. 25 closing price. But the latter’s
shares have nearly doubled over the past year, thanks to a rally
in the global tech sector, while Japanese equities are trading
at 34-year highs. Last month, Toyota Motor  7203.T  and its
affiliates raised $4 billion after selling down a stake in
supplier Denso  6902.T .
    For deal-starved investment banks, the chunky share
placement is welcome. The recent rout in Chinese equities has
added more gloom to global capital markets activity, where deal
volumes have collapsed and banks are cutting jobs. Japan will be
a bright spot as more sales gather pace. (By Anshuman Daga)
    
     
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 (Editing by Robyn Mak and Katrina Hamlin)