26 Mar Japan’s M&A in Australia: More on the Horizon
AJBCC Japan Business Alert [No:15/2] commented on the outstanding example of Japan Post’s acquisition (now FIRB approved) of Toll. But apart from this mega acquisition, smaller sized deals by Japanese companies have continued to occur. Interestingly, this is witnessing Japanese investment in Australia broadening out from the traditionally favoured areas of resources, energy and agricultural commodities.
Japan’s staffing major, Recruit has in one deal become the second largest staffing company in Australia due to the acquisition of two Australian companies, Peoplebank and Chandler Macleod. The reported deal size was $360m.
Some of Japan’s staffing companies have had an involvement in Australia over decades. However the initial strategy much like the early investments in Australia by Japanese retailers was flawed, focusing on a Japanese rather than a local market client base. In recruitment, there was not enough volume in that market segment and as a result, big Japanese players such as Recruit or Pasona never saw a sizable business opportunity. To take on the major Australian players through a greenfield investment strategy in the competitive Australian market was seen by them as high risk. So the current strategy of Recruit, much like the Toll acquisition, is attacking the opportunity by procuring an asset which has embodied in it extensive local market expertise.