Ignore the headlines

August 01, 2007

Some recent headlines in Tokyo suggest a turning back of the clock in Japan's nascent market for corporate control. In one case, Matsushita's exclusive negotiation period with TPG over a potential sale of Matsushita subsidiary JVC expired without an agreement amid open efforts by JVC management to prevent the sale. Matsushita was then widely rumored in late June to have agreed an alternative business combination between JVC and former suitor Kenwood Corporation. The reported transaction would be a staged one, however, with an initial equity investment in JVC by Kenwood to be followed by the establishment of a joint holding company in 2008. Use of a joint holding company structure has become a common method in Japan of achieving a defensive business combination while postponing a true integration of operations.

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