Japan's European quest
Asian Legal Business
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In 2020, Nishimura & Asahi made history as the first Japanese law firm to establish a presence in Europe by launching two offices in Germany. The firm is now poised to enhance its European footprint with the opening of new offices in London and Brussels in early 2025.
The Japanese Big Four firm highlighted the strategic significance of these new locations. London serves as a global center for M&A and finance, housing many European headquarters of Japanese corporations. Meanwhile, Brussels stands as the heart of EU policies and regulations. Nishimura emphasized that these offices are essential for delivering optimal support to their clientele.
The firm branded this move as groundbreaking for an Asia-based law firm. M&A specialist Yoshiyuki Kizu will lead the London office, while competition law expert Kojiro Fujii will oversee the Brussels location.
"In recent years, particularly in Brussels, we have witnessed rapid changes in competition and international economic laws, as well as updates to policies and regulations around sustainability and data protection ... London continues to maintain its reputation as a hub in European M&A and finance even after Brexit, where the demand for expert legal services continues to increase." - Nishimura & Asahi
In the past decade, Japan's domestic economy has been grappling with significant challenges, including an aging population, stagnant growth, and deflationary pressures. These factors have created a difficult environment for Japanese companies seeking to expand and increase profits solely within their home market. As a result, many Japanese firms are increasingly looking abroad for growth opportunities, driving a surge in cross-border investments and acquisitions.
In the first nine months of 2024, the volume of inbound and outbound transactions in Japan has significantly increased compared to previous years. However, U.S.-related deals have dominated the deal table, with German engineering giant Robert Bosch's $8 billion acquisition of Johnson Controls' and Hitachi's residential ventilation business being the sole transaction involving European participation.
Meanwhile, European markets have been struggling to shake off the parochial status quo of the old economy and a general reluctance to embrace profitable companies, while also having to fend off intense competition from the U.S.
In Britain, Brexit has depleted London's allure of a deep investor base, forcing foreign investors and law firms to craft a separate, distinct strategy for a smaller, conventional market betting the farm on its financial services sector.
The situation on the ground presents Japanese companies seeking European expansion with important factors to weigh. To truly compete effectively in a commercial sense, Japanese law firms - even boasting the resources and caliber as Nishimura - need to develop a highly targeted, specific, and long-term strategy tailored for the European market's unique characteristics.
Are Japanese firms prepared to navigate the labyrinthine corridors of Europe? Write to me at [email protected] and include your full name and location. We might feature your response in a future edition.
Bain Capital goes long on Japan
Bain Capital, the U.S. private equity giant, has recently made waves in the Japanese market with its $694 million majority acquisition of Red Baron Group, Japan's largest used-bike dealer.
Ropes & Gray and Anderson Mori & Tomotsune have advised Bain Capital. Nishimura & Asahi advised Red Baron.
This landmark deal underscores Bain's increasing focus on Japanese investments and signals a broader trend of foreign private equity firms targeting opportunities in the world's third-largest economy.
The Red Baron Group acquisition is just one of several significant moves by Bain Capital in Japan. The firm has also launched take-private offers for Trancom, a logistics services, industrial support, and IT systems company, valued at $491 million; and T-Gaia, a Tokyo-based mobile phone distributor, for $987 million.
These deals, coupled with Bain's recent binding offer to acquire Fuji Soft, a Japanese software developer, for approximately $4 billion, demonstrate the firm's aggressive expansion strategy in the Japanese market.
Bain Capital's commitment to Japan goes beyond individual acquisitions. The global buyout firm has announced plans to invest a total of ￥5 trillion in Japan over the next five years.
Specifically, Bain sees significant potential in Japan's "highly segmented" industries, particularly in automobile parts and basic materials, where it anticipates increased realignment and consolidation activities.
This investment strategy aligns with changing attitudes in Japan's corporate landscape, where shareholders and managers are becoming increasingly focused on capital efficiency, creating a fertile ground for private equity firms like Bain Capital to drive value creation and industry transformation.
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Battle for arbitration pros
In the legal world chess match, U.S. heavyweight Skadden, Arps, Slate, Meagher & Flom and South Korea's Lee & Ko have made their moves, both aiming to enhance their international arbitration capabilities by adding industry giants on their teams.
Skadden pulled off a coup, luring the seasoned commercial arbitration maestro Friven Yeoh from rival Sidley Austin. Yeoh, now at the helm of Skadden's international litigation and arbitration group in Asia, is set to split his time between Hong Kong - where the arbitration team has grown to five lawyers, including two partners - and Singapore, where he stands as the sole arbitration partner to support the corporate and litigation teams.
Lee & Ko snagged their own legal Goliath, Park Eun Young. Fresh from his stint as an independent arbitrator and former co-chair of Kim & Chang's arbitration and cross-border litigation group, Park brings three decades of international commercial and investment treaty arbitration experience to the table.
Having spent a quarter-century at the top Korean firm, Park is practically legal royalty. Lee & Ko's power play comes hot on the heels of arbitration partner Sunyoung Kim's exit to Baker McKenzie's South Korean alliance firm, Baker McKenzie KLP JV, in May.
Coming up
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