From Breakingviews: A shrinking domestic market and cheap money prompted Japanese firms to ramp up abroad. Their EU counterparts face similar stagnation. Watch the shopping habits of Siemens, Eni and others in 2020, says peter_tl:
LONDON - European companies are limbering up for a Japanese-style foreign takeover binge. A shrinking domestic market and super-low borrowing costs spurred firms in Asia’s second-largest economy to pursue ever-bigger overseas targets. Now their European Union counterparts, facing similar challenges at home, are poised to follow suit. Expect the likes of Germany’s Siemens, Italy’s Eni and banks such as BNP Paribas and ING to push further into faster-growing markets as 2020 kicks off.
Over the last five years, Japan’s corporate titans have spent an average of more than $100 billion a year on outbound mergers and acquisitions, according to Refinitiv data, up from $59 billion annually in the first half of the decade. EU companies have already been cranking up overseas purchases. Over the last five years they have spent $273 billion a year on targets outside the bloc, up from an average of $176 billion in the decade’s first half, Refinitiv calculates. Transactions like luxury giant LVMH’s $16 billion takeover of American jeweller Tiffany & Co underscore an eagerness to tap into growth in the United States and Asia.
Large EU companies are already more multinational than their Japanese counterparts. About half of the 300 constituents of the Euro Stoxx index generate a “substantial proportion” of their revenue outside the single currency area. That should ensure deals yield more cost savings, which will please shareholders and potentially keep activists at bay.
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Europe will emulate Japan’s foreign takeover bingeA shrinking domestic market and cheap money prompted Japanese firms to ramp up abroad. Their EU counterparts already have greater international exposure but face similar stagnation and demographics at home. Watch the shopping habits of Siemens, Eni, Roche, ING, SocGen and others.
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Europe will emulate Japan’s foreign takeover bingeA shrinking domestic market and cheap money prompted Japanese firms to ramp up abroad. Their EU counterparts already have greater international exposure but face similar stagnation and demographics at home. Watch the shopping habits of Siemens, Eni, Roche, ING, SocGen and others.
Leer más »
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