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INVESTMENT BANKING | Staff Reporter, Japan

M&As by Japanese banks and others rise to record heights

Yes, you can definitely blame it on the strong yen.

The Japanese government has reported that Japanese banks and other firms did a record number of mergers and acquisitions in 2011 as a result of funds made possible by the strong yen and government support.

It said Japanese companies bought or took control of 455 firms in 2011, the largest number since 1996. Japanese firms paid some US$78.4 billion for these M&As.

Among the Japanese banks intent on M&As as a path to growth is Sumitomo Mitsui Financial Group, Japan’s second-largest bank by market capitalization, which bought RBS Aviation Capital based in Dublin, Ireland and has taken part ownership of Moelis and Company, a five-year old U.S. financial adviser. SMFG intends to increase its overseas assets by US$78 billion over the next two years.

Japanese firms were aided in their M&A binge, mostly in Europe, by a government credit line worth US$43 billion raised by the Japan Bank for International Cooperation and the three biggest Japanese commercial banks, including SMFG.

Sources said Japanese firms had already taken $1.4 billion of this amount, and the figure is expected to grow as more and more deals enter funding stages.

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