1. By: the Marketeers

2.  Has long been one of the most closed among major economies  In the 90’s, international investors poured into Japan  Signature corporations fell into foreign hands ◦ Nissan Motor Co. ◦ Long-Term Credit Bank of Japan (Shinsei Bank Ltd.)  Foreign ownership of shares has soared ◦ 4% in 1988 to 28% in 2006

3.  Number 2 economy in the world is rebuilding walls for protection  Using cross-shareholding to make takeovers harder for outside companies  Using American antitakeover defense from the 80’s known as the “poison pill”

4.  Since profits are up and shares remain cheap, takeovers are more common now than before  2/3 of listed companies trade at a price-to- earnings ratio of less than 1 ◦ Meaning their assets could be sold for more than the cost of buying the whole company  Between 2002-2007 the value of private- equity buyouts has almost tripled to $11.1 billion

5.  Per-capita gross domestic product was the lowest in the Group of Seven rich nations last year ◦ In the early 90’s it was the highest  Doesn’t give them the right image ◦ "Japan needs to carry out reforms so it won't be seen as a reclusive country, or a kind of capitalism driven by the bureaucracy.“

6.  More Japanese are retiring each year than are joining the work force ◦ Raise work force’s productivity to avoid falling living standards  Foreign investors make up more than half of the total trading in Tokyo stocks, the world's 2 nd largest market

7.  There has been a steady decrease in the number of Japanese cross-shareholdings  International companies were increasing in their shares of Japanese companies  Japanese cross-shareholdings are now increasing due to the revival of antitakeover defense

8.  Nissan held 21% of Kasai’s shares through the 90’s and friendly parties held the rest  Renault SA bought 44% stake in Nissan in 1999 and told Kasai that Nissan would no longer remain a shareholder  Kasai chose to value their independence and choose their buyers  Japanese company assembled a 10% stake in Kasai “to make our relationship closer”  Tachi-S bough 4.2% of Kasai’s shares and Kasai bought 2.5% of Tachi-S

9.  About 52% of Kasai’s share are held by stable shareholders  Other companies are following suit  However, there are no stable shareholders, if the price is high enough

10.  Small condiment maker  Had lots of cash, no debt and operating profits that were solid and predictable  10% of the company was owned by Steel Partners  Wanted to take it global  Gave offer for the 90% it didn’t already own  Poison pill used to dilute Steel Partners’ holdings to less than 3%  Steel Partners was labeled as an “abusive acquirer”

11.  Warrants from the poison pill were paid off to Steel Partners at a value of 2.1 billion yen (just over $20 million)  "What Bull-Dog did was a travesty…. The stakeholders of the company have suffered dramatically."

12.  Australia’s Macquarie Group bought 19.9% stake in terminal facilities at Haneda (Tokyo’s main domestic airport)  Haneda has long been a source of jobs for senior officials after they finish working at the ministry  The airport bill keeps foreigners from owning more than 1/3 of a terminal facility  This bill raises question about what direction Japan is headed

13.  After being open to foreign investments, Japan is gradually closing its doors  Cross-shareholding and poison pills are being used as their defense  Both positive and negative effects