EUR 399.00 For Business Accounts Only

Japan's misguided Matryoshka M&A

​In the last 25 years, Intel Corp on its own has managed to make 31% more net income than all 20 of Japan’s largest tech companies combined on a currency adjusted basis. That is right. Intel on its own has thumped the likes of Sony, Panasonic, Toshiba, Sharp, Mitsubishi Electric, NEC, Hitachi, Fujitsu, Fuji Film, Konica Minolta, Brother, Nidec, Kyocera, Canon, Olympus, TDK, TEL, Ricoh, Advantest and Nikon combined. Intel does one thing very well, commands huge market shares and ensures its product is needed in pretty much most electronic devices that matter. Still many Japanese electronics companies are stuck in highly competitive segments where even foreign brands like Samsung are no longer sneered at. Still corporate Japan thinks matryoshka style mergers are key to survival although history on many occasions has proved otherwise. The latest news is that scandal plagued Toshiba is in talks with Fujitsu to merge their loss making PC units where the two share 6% of the global market. There is a lot of precedent suggesting that this is a fruitless exercise. As one of my colleagues put it best, “two drowning men together don’t make a swimmer”. One would hope that Toshiba’s revived sense of corporate governance would see the majority independent director led board seek more severe action.