German Bosch unveils €1.1bn disposal of Denso stake

German technology supplier Robert Bosch GmbH said on Thursday it had recently disposed of its remaining 5% stake in Japanese car parts maker Denso Corp (TYO:6902) for around EUR1.1bn (USD1.4bn).

Robert Bosch Investment Nederland BV had sold all of its non-strategic shareholding in Denso which comprised roughly 46m units, Bosch said without disclosing the name of the buyer. The group intends to use the cash funds for capital expenditure in fields with promising future, as well as to finance takeovers.

The two parties have been collaborating since 1953 when they sealed their first license contract regarding the production of electric automotive equipment. The German group, which has been a shareholder in Denso since the mid 1950s, had divested a part of its original investment in 2009. The firms also have two joint ventures.

More specifically, they have stakes in US-based vehicle fuel pumps producer Associated Fuel Pump Systems Corp (AFCO) and in Advanced Driver Information Technology Corp (ADIT) which develops platforms for vehicle infotainment systems in Japan and Germany.

Bosch noted that the stake sale will not affect the long-standing partnership between the two. They will still collaborate within the framework of existing alliances and will continue to examine opportunities for future ones.

Dole Food in talks to sell non-core assets to Japan’s Itouchu

US fresh fruit and vegetables producer Dole Food Company Inc (NYSE:DOLE) moved to address market rumours by announcing it was in talks with Japan’s Itochu Corporation (TYO:8001) over the sale of certain operations.

Dole said that the negotiations were at the advanced stage and revolved around its Packaged Foods and Asia Fresh units. The two sides have yet to reach a definitive agreement and Dole remains in talks with several other parties interested in these businesses and some other assets, the company added.

The US group announced early in May that it had launched a strategic review and retained the services of Deutsche Bank Securities Inc and Wells Fargo Securities LLC to explore potential transactions. Dole stated at the time that a possible scenario involved selling or carving out its packaged foods unit. Another course of action under consideration was the separation of the Asian division, the idea being to create a standalone business through a flotation or a joint venture.

In an article reporting the confirmation of Dole’s talks with the Japanese trading group, the Financial Times said that the statement from Dole came in response to a report published in Nikkei. According to the Japanese business daily, Itochu was prepared to part with USD1.7bn (EUR1.3bn) for ownership of the businesses, the FT added.

Permira-backed Consumer invests in Japanese sushi chain Akindo

Irish investor Consumer Equity Investments Ltd (CEIL), backed by British buyout firm Permira Advisers LLP, said on Friday it had agreed to buy the stake held by Japan’s Unison Capital Inc in local sushi restaurant chain Akindo Sushiro Co Ltd.

The transaction values the Japanese business at about USD1bn (EUR797bn) in terms of enterprise value. It represents the fourth investment in Asia supported by the Permira funds and also the second one in Japan alone after the purchase of agrochemical business Arysta Lifescience Corp in 2008.

CEIL said it will assist the management team of Akindo Sushiro in extending the business’ store network domestically and internationally. Both the Irish firm and the Permira funds are committed to providing funding resources for this purpose, while maintaining the Japanese company’s independence, Permira partner Alex Emery stated.

Osaka-based Akindo Sushiro has established itself over the last few years as the number-one revolving sushi restaurant chain in the country in terms of revenue and currently operates 335 revolving counter sushi bars. As of December 2011, the company also has presence in South Korea. For the fiscal year to 30 September 2011, Akindo Sushiro generated a revenue of some JPY100bn (USD1.3bn/EUR1bn). It has a headcount of more than 1,000 full time and 10,000 part time employees.

Nomura Securities offered financial advice to CEIL in this transaction.

Tesco to exit Japan via two-stage sale to domestic player Aeon

British retailer Tesco Plc (LON:TSCO) said on Monday it would sell 50% in its Japanese business to domestic sector player Aeon Co Ltd (TYO:8267) as part of a planned two-stage exit from this market.

Tesco said it would get a nominal price for the stake in Tesco Japan and will then create a joint venture with Aeon. Under the terms of the JV, the British supermarket giant would invest some GBP40m (USD63m/EUR49.4m) as a partner to fund additional restructuring at the business. After this move, Tesco would have no further financial exposure to the Japanese business or its operations, it said.

Tesco’s CEO, Philip Clarke, welcomed the transaction in a comment saying it would provide the best outcome for employees, Japanese customers and the group’s shareholders.

The British group, which unveiled plans to shed its Japanese business in 2001, said the completion of the deal is pending regulatory clearance.

Tesco Japan is made of 117 Tsurakame, Tesco and Tesco Express small stores located in the greater Tokyo area.

UK’s Tesco stepped into Japan in 2003 when it bought C2 Network, operating the Tsurakame branded stores.

Aeon runs more than 1,200 supermarkets in Japan. The group has 12 core retail businesses, which, apart from the supermarket operations, also include a general merchandise store business and strategic small size store business.

British bank Lloyds to dispose of Japanese GoLloyds unit

British lender Lloyds Banking Group Plc (LON:LLOY) announced on Tuesday it will dispose of its remittance operations in Japan, called GoLloyds, to local Shinsei Bank Ltd (TYO:8303) for a non-specified sum.

The sale is part of Lloyds’ strategy of narrowing its international presence, the lender said, adding it does not expect the transaction to have a material impact on its accounts. At present, Lloyds’ Japanese presence consists of a branch that conducts remittance and deposits business.

Separately, Shinsei Bank said the deal will complement and further improve the suite of foreign currency deposit services for individual customers. The bank also noted that demand for overseas remittance services in the country is rising as the number of both foreign residents and overseas visitors is seen to go up in the near future.

The divestment needs to be greenlighted by local regulators and is projected to close during the second half of the year. The total assets of the business being sold were GBP1.5m (USD2.3m/EUR1.8m) as at the end of December 2011.

In late March 2012, Lloyds announced it was selling its onshore Dubai activities, which had total assets of GBP482m, to HSBC Bank Middle East Limited as part of the same strategy.

Japan’s 1990s Recession Could Hit the USA, Experts Warn

Shinjuk, Tokyo's Commercial CentreThroughout the 1990s, Japan experienced an asset price bubble which halted economic growth for the better part of a decade. Residents call it the ‘lost decade’, while those outside of the country with investment capital in Japanese businesses have referred to the late 1990s economic bubble as one of the largest cases of nationwide economic mismanagement in history.

It’s been blamed for Japan’s decline in the industrial manufacturing race, one it’s now locked into with nearby rival China. And while the Japanese industrial sector may not have fully recovered from the crash, many believe it will continue to work efficiently. However, with the United States recovering from a similar period of financial error, many believe the ‘lost decade’ could make its way across the Pacific.

Financial experts have pointed to the United States’ housing bubble as a similar economic trend to that seen in Japan, arguing that it could set off a similar long-term recession effect. While US-based businesses have largely recovered from the recent recession, the country has several pockets where growth is not expected for the remainder of the year due to unemployment and mass foreclosures.

It’s a prospect that’s surprisingly realistic. With President Barack Obama pointing towards the asset bubble in 2009 as a possibility for the United States, many believe that a decrease in output is an inevitability. While the Japanese survived the long-term downturn through traditional frugality, it seems unusual that such an economic trend would not cause major problems in the United States.

However, it’s important to establish that the prospect of major long-term economic contraction is fairly low, both in North America and other developed economies. With the economy currently in a state of slow expansion, a lost decade of economic contraction is unlikely under current industrial productivity and policy stability.