October 17, 2012

M&A Prospects Lead Citi to Add Seven in Japan

Cross-border moves expected to boost business as companies seek expansion

The Citigroup headquarters in New York. (Photo: AP) The Citigroup headquarters in New York. (Photo: AP)

A stagnating local economy and a strong yen are leading Japanese companies to look outside their own borders for expansion, and sources say that has led Citigroup to add seven bankers—two senior staff and five junior—in the country to tend mergers and acquisitions.

Bloomberg reported Wednesday that an internal Citigroup memo said that as of Nov. 1, Masao Yoshikawa is to join Citigroup as managing director and head of Japan M&A. Yoshikawa’s hiring was confirmed by Tokyo-based spokeswoman Mika Nemoto, who did not provide further comment. The sources said that some of the new hires are already working, while others will start within three months.

Two people familiar with the additions were cited saying that Citi made the move expecting that cross-border acquisitions and restructuring will increase. Bloomberg data indicate that in 2012, Japanese companies announced overseas acquisitions valued at $96 billion, the most since at least 2000. Just Monday Japan’s Softbank said that it would acquire 70% of Sprint.

According to Citi’s memo, M&A activity in Japan is “expected to remain robust, particularly in outbound crossborder M&A.” It also said that Yoshikawa was most recently a partner and Japan representative of private equity firm Silver Lake.

Citigroup has cut jobs globally under former CEO Vikram Pandit, who stepped down Tuesday. Recruitment consultant Katsunobu Komizo, president of Executive Search Partners Co., the largest recruiting firm in Japan that focuses on banks, said in the report that the pace of major job cuts at the largest banks is slowing, while some U.S. firms that do business in Japan see younger staff hires as a means of cutting personnel expenses while still being able to take advantage of rising business opportunities.

“There are growing needs for young people, especially among U.S. banks as business is shifting to them from European firms,” Komizo was quoted saying. “Young bankers are also hungry to tackle global business at U.S. banks and break out of Japan’s stagnated markets.”

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