But it gets a $ 8 billion deal to buy Hitachi Metals
Bain Capital is finalizing a $ 8 billion deal to acquire Hitachi Metals after giving the consortium led by the U.S. private equity group exclusive rights to trade in the listed material group in Tokyo, according to people directly familiar with the discussions.
Under the deal, which has been under discussion since last August, Hitachi will sell its 53 percent stake in Hitachi Metals, which has historically been one of the most important subsidiaries of the Japanese conglomerate.
The majority of shareholders ’sales of Hitachi Metals would be one step closer to the removal of the shares of the parent company from its listed subsidiaries. Investors have identified this goal as a metric the progress of corporate governance.
The sale has also come Hitachi’s $ 9.5 billion deal The acquisition of the US software engineering team GlobalLogic is expected to be the largest acquisition ever by the Japanese company and the interest-bearing debt will be $ 28 billion.
“If the company earns money from the rest of the listed subsidiaries, Hitachi Construction Machinery and Hitachi Metals … would have additional debt and additional leverage management leverage,” Motoki Yanase, chief credit officer of Moody’s rating agency, said in a report Monday.
The consortium led by Bain brings together Japan Industrial Partners (JIP) and Japan Industrial Solutions (JIS). JIP was created almost 20 years ago with investments from the lender Mizuho and Bain. He has been involved in the purchase of many Japanese industrial gems, including Sony’s Vaio laptop business and NEC’s defense equipment subsidiary. JIS is a private equity asset manager created in 2010 with the largest capital in Japan.
Bain’s exclusive rights to trade Hitachi Metals include private equity firms worldwide, including KKR, Carlyle, Blackstone and Apollo, which are increasing their presence in Japan as large conglomerates exclude non-core businesses and assets.
As a sign of rising private capital intentions in Japan, Toshiba said on Wednesday has received a formal approach CVC from the European fund. People familiar with the situation said the $ 20 billion deal could become the largest lever purchase in Japanese history.
But it has formed a chain of agreements in recent years. The largest was the 2018 Toshiba Memory, which was bought for $ 18 billion by a consortium including SK Hynix of South Korea. Bain also bought it last May Showa Aircraft Industry The Boston-based fund was given a 1.25-square-meter land bank outside Tokyo in the deal.
Hitachi said no formal decision has been made on the sale. Hitachi Metals has not commented.