English message after Japanese ───────────────────────────────────── Vital Japan 第76回勉強会: 2010年1月16日(土) 6:30pm- 【飯田橋】 ◆Topic:「日本経済活性化! - 活力を生み出す中堅企業のM&A」 "Activate mid-cap market in Japan!" 使用言語:英語 ─────────────────────────────────────
*Meeting Flow: Networking time -6:30pm Presentation and discussion in English
More than a quarter of a century has passed since people realized that the large firms do not create new job opportunities. This is not just Japan but in the rest of the developed countries. They are growing small/middle-sized enterprises (SMEs) and venture firms that create new jobs.
Those who create new job opportunities are facing crisis in Japan. The first is the aging CEOs. The average age of CEOs is over 60 years old and they are suffering from the lack of business successors. The second issue is diminishing value of going public (IPO) for SMEs with profit of several million dollars or less because of the three factors: a) the bar raised for IPO, b) introduction of SOX law equivalent in Japan, and c) low stock price they can accomplish in the weak market.
Government policy for SMEs is nothing but to subsidize poor SMEs, which is like just putting life-support equipment to the ill. It is not only encouraging the growth of firms but supports some problematic companies to survive as well, which may result in cutting the profitability of the healthy companies.
It is behind this backdrop that we will discuss the need for activating M&A in the small/middle-sized cap market. Some of you may have negative images about M&A like vulture or something irrelevant to yourselves. That perception is in fact representing the issue facing us. While avoiding M&A without consideration, increasing number of SMEs will disappear due purely to the lack of successors like extinct species. Growth opportunities of emerging businesses through IPO are diminishing. I believe we need to have a better understanding about M&A as a society. Hope this study event will help you realize the issues facing us.