Japanese Takeovers: The Global Contest for Corporate Control

328 Pages·1991·43.024 MB·English

by  W. Carl Kester

THE GLOBAL
CONTEST FOR
CORPORATE
CONTROL
HARVARD BUSINESS SCHOOL
Japanese
TAKEOVERS
Although much has been reported about the
increase in Japanese merger and acquisition
activity,Japanese Takeovers is the first compre-
hensive study ofthis modern global trend. Carl
Kester delves beneath conventional wisdom
about Japanese corporate acquisitions to pre-
sent the reader with a fresh interpretation of
Japanese behaviorin the global marketforcor-
porate control. His work offers an historically
informed and economically acute perspective
that will help Western managers proceed with
greater confidence in this unfamiliar, rapidly
changing territory.
By exploringthe economiclogicunderlying
the managementofstrategically importantbusi-
ness relationships, Kester builds a compelling
newparadigmofJapanesecorporategovernance
thatsupplants simplisticcultural or"Japan Inc."
explanations ofJapanese takeover activity. He
argues thatJapan has nothad an active market
for corporate control because ithas notneeded
one. Japanese companies prefer building and
managing long-term business relationships
with otherfirms to owning them outright.This
is true even overseas. Kester shows thatrecent
Japanese cross-bordertakeovers have been trig-
gered morebytheneedtodefendvaluablebusi-
ness relationships than by a surge in bidding
power.
Financial liberalization will further inte-
grateJapan intothe global marketforcorporate
control and increase Japanese use of Anglo-
American takeover tactics. But Kester cautions
against oversimplification. The economic
advantages inherent in the Japanese corporate
governance system will inhibita complete con-
vergence of Japanese and Western M&A mar-
kets. Successful M&A dealmakingwith Japanese

JAPANESE TAKEOVERS

JAPANESE TAKEOVERS
The Global Contest
for Corporate Control
W
CARL KESTER
HARVARD BUSINESS SCHOOL
Harvard Business School Press
Boston, Massachusetts
© 1991 bythePresidentandFellows ofHarvardCollege
Allrights reserved.
PrintedintheUnitedStates ofAmerica.
95 94 93 92 91 5 4 3 2 1
Thepaperusedinthispublication meetstherequirements oftheAmericanNational
StandardforPermanence ofPaperforPrintedLibraryMaterials Z39.49-1984.
LibraryofCongress Cataloging-inPublicationData
Kester,W. Carl.
Japanesetakeovers : theglobalcontestforcorporatecontrol/W.
CarlKester.
p. cm.
Includesbibliographicalreferences andindex.
ISBN 0-87584-235-6 (hardcover acidfreepaper)
: —
1. Consoli—dation andmergerofcorporations Japan. 2. Corporate
governance Japan. 3. Corporations,Japanese. I. Title.
HD2907.K45 1990
338.8'3'0952—dc20 90-40430
CIP
To my wife,
Jane,
and ourchildren,
Kelsey, Eric, andKirsten