Mizuho Financial Group Inc. (8411), Japan’s No. 1 takeover adviser in 2012, plans to hire senior bankers in the U.S. and Europe this year to help local companies make acquisitions abroad.
The Japanese firm wants to add bankers who have access to top executives in the health care, energy, technology, media and telecommunication industries overseas, Hiroshi Motoyama, chief executive officer at the Mizuho Securities Co. unit, said in an interview. It plans to recruit fewer than 10, he said.
Japanese companies are spending unprecedented amounts buying businesses offshore to counter the shrinking domestic economy and population. Mizuho is hiring at a time when global investment banks including Morgan Stanley cut jobs to improve profitability amid stricter capital rules and an industry slump.
“The pipeline is expanding quite well” with global cross- border as well as domestic restructuring deals, Motoyama, 58, said on Jan. 11. “It’s key that we have strong bankers who can introduce CEOs to Japanese companies. We can’t cover all industries, so we have to target a few.”
Mizuho vaulted past Nomura Holdings Inc. (8604) as the top financial adviser for Japan-related takeovers last year after working on Softbank Corp. (9984)’s record $20 billion bid for Sprint Nextel Corp. Japanese companies announced overseas takeovers valued at $115 billion in 2012, the most since at least 2000, according to data compiled by Bloomberg.
The securities unit plans to send two or three junior bankers from Japan to New York and London to obtain expertise on cross-border deals, Motoyama said, adding that he will also hire foreign graduates in Tokyo. The firm has about 130 M&A bankers, including about 10 each in New York and London, he said.
“It’s critical for a bank to have senior bankers who have networks and reliable relationships with top executives,” said Koji Hirai, head of M&A advisory boutique firm Kachitas Corp. “There are many cases where top officials say ‘I am telling this only to you because it’s you.’”
The unit of Japan’s third-biggest lender by market value is rebuilding its investment banking operations after cutting jobs and closing brokerage branches last year. Mizuho Securities posted net income of 2.9 billion yen ($32 million) for the three months ended Sept. 30, compared with a loss of 18.2 billion yen a year earlier.
In contrast, Morgan Stanley (MS:US) plans to trim about 15 percent of its investment banking positions in Asia as it starts a round of job cuts this week, two people familiar with the matter said. Globally, the U.S. firm is eliminating about 1,600 jobs from its investment bank and support staff in coming weeks, a person with direct knowledge of the matter said on Jan. 9.
Shares of Mizuho rose 0.6 percent to 170 yen at the lunch break in Tokyo. They have gained 56 percent over the past 12 months.
Japan will have more domestic mergers this year as the weakening yen boosts exporters’ earnings and spurs them to consolidate to fend off global competition, said Hirai, a former M&A head at a brokerage unit of Mitsubishi UFJ Financial Group Inc. (8306) Japan’s currency touched 89.67 against the dollar yesterday, the lowest since June 2010.
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