Mizuho Financial Group overtook Nomura this month after winning a role advising and managing funding for Softbank’s record $20bn bid for Sprint Nextel Corp. Mizuho has worked on Japanese mergers and acquisitions announced this year valued at $77bn, while Nomura advised on deals worth $52bn, according to data compiled by Bloomberg.
Nomura’s waning M&A status is a setback for Chief Executive Officer Koji Nagai, who took over on August 1st following revelations that employees tipped off traders about clients’ plans, prompting his predecessor to resign. It also reflects the disadvantage Japan’s biggest brokerage has compared with banks that can marry loans with mergers advice at a time when domestic companies are spending a record amount on takeovers abroad.
'Compliance matters when clients look for an adviser, especially on cross-border deals, as the U.S. and Europe are very strict about it', said Koji Hirai, head of M&A advisory boutique firm Kachitas Corp. 'The financial adviser’s lending power is also becoming more crucial in the selection process'.
Softbank hired Deutsche Bank AG (DBK) and Raine Group LLC for its takeover of Overland Park, Kansas-based Sprint in the largest overseas acquisition announced by a Japanese firm in at least 12 years. Mizuho is also advising Tokyo-based Softbank on its plans to buy domestic rival eAccess Ltd. for $2.2bn. Nomura is absent from that transaction as well.
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