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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up? -- Ignore unavailable to you. Want to Upgrade?

To: fut_trade who wrote (1807)	3/24/1999 8:38:00 AM
From: chirodoc	Respond to of 3902

more dereg: New Japan, Wako to Merge, Creating Japan's 4th-Largest Securities Firm Dow Jones "ewswires this is the important part: "Japan's financial deregulation has increased competition among the nation's securities concerns, driving many of them to restructure or seek alliances to strengthen their positions." TOKYO -- New Japan Securities Co. and Wako Securities Co. Wednesday announced that they will merge in April 2000, creating the fourth-largest Japanese securities company. The companies said the move would be the first merger between midsize Japanese brokerages and would create the country's fourth largest securities firm after Nomura Securities Co., Daiwa Securities Co. and Nikko Securities Co., with 9.4 trillion yen ($79.61 billion) in client assets. Japan's financial deregulation has increased competition among the nation's securities concerns, driving many of them to restructure or seek alliances to strengthen their positions. The companies tentatively said that one share of New Japan will be exchanged for one share of Wako. The terms will be officially decided by a joint committee. New Japan will be the surviving entity for legal purposes. New Japan and Wako, both affiliates of Industrial Bank of Japan, said the newly created company will take over the IBJ's retail securities business throughout the country. The new brokerage will have around 5,000 employees, after the two companies shed a total of 2,200 jobs. Both brokerages will withdraw from foreign business operations and cut the number of domestic branches to 90 from 127, local newspaper reports said. New Japan said it plans to close subsidiaries in London, Hong Kong, New York and Switzerland, and shut representative offices in Frankfurt, Beijing, Shanghai and Taipei. For necessary overseas securities operations, it will use IBJ's overseas network. Meanwhile, Wako plans to complete bad-debt write-offs of its ailing nonbank unit, Wako Finance Co., by extending a total of 33.7 billion yen in financial aid. The special loss will be covered by a 35 billion yen subordinated loan it plans to apply for later this month. IBJ will hold a total 25% stake in the new company's capital. Its stake will be 20%, up from the 4.9% in New Japan and 4.7% in Wako. IBJ Securities Co. will hold a 5% interest, the companies said. Tadashi Kawaguchi, president of New Japan, will serve as president of the merged company. Wako President Masaaki Sugishita will become chairman. More Consolidation Seen Analysts say more mergers in the sector wouldn't be surprising, especially since the Oct. 1 liberalization of stock-broking commissions should cut a major source of income for many companies. While the environment surrounding Japan's securities industry has been harsh, business is expected to become even tougher in the near future as more and more companies enter the industry. Both New Japan and Wako lost money for most of the current decade after the bubble economy burst in the early 1990s.