Nomura Holdings Inc.’s dealmaking team expects more mergers as governments and investors put mounting pressure on companies to improve their standing on environmental, social and governance scores. “With various nations promoting ESG, the move toward business reorganization will likely gather momentum among relevant sectors,” Shinsuke Tsunoda, global head of mergers and acquisitions at Japan’s largest brokerage, said by email.
With about $4 of every $10 of global equity inflows now heading into ESG funds, there’s a renewed focus among senior managers to improve their firm’s grading. Simplifying businesses or shedding assets to meet climate goals may be one avenue CEOs take in lieu of a takeover with the cost of capital for firms increasingly being linked to ESG performance.
Tsunoda said he expects more deals by companies seeking to “change the way they do business or the quality of it,” such as making a subsidiary a wholly-owned unit so they can implement change without worrying about minority shareholders. There could also be some large-scale mergers by companies in the same industry, he said. Tsunoda declined to name which sectors might see the rise in M&A activity.
Source: BNN Bloomberg
By Takashi Nakamichi and Takako Taniguchi
Can't stop reading? This and all news articles are property of their creators, many are not owned or provided by Private Equity Insider. As an event organizer and community platform, we curate content from reliable sources for your suggested reading, and advise you to read the full articles from the referenced authors and sources.