Following last month’s $1.67 billion acquisition of Panasonic Corp.’s health care unit by KKR & Co., some are wondering if Japan Inc. is starting to cast off a longtime aversion to private equity.
“Many Japanese corporations have recognized that if they don’t sell noncore businesses, they will likely not survive,” says Ropes & Gray Tokyo partner Scott Jalowayski. “Foreign private equity can take the asset off of the books, add value, and ideally turn the businesses around. They are coming in to help.”
That certainly seems to have been the case for Panasonic. Once a symbol of Japan’s economic and technological prowess, it and other Japanese electronics giants have since been outpaced by the likes of Samsung Electronics Co. Ltd. and Apple Inc. In each of the past two years, Panasonic has reported a $7.5 billion loss, and its management has decided to pare the number of its business units from almost 90 to 49.
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