Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Thematic (Sector/Industry)

<ul>
<li>The following is an in-depth review of the Japanese retail sector in 2021-22 and is designed to provide a complete overview for any investor in Japanese retail/consumer markets.</li>
<li>FY2021-22 proved a rebound year for retailers at the sector level. But on a company by company basis, there has been radical divergence between the best and the rest. </li>
<li>We look at the reasons for this divergence and the implications for Japanese retail and consumer firms in the years ahead.</li>
</ul>


The following is an in-depth review of the Japanese retail sector in 2021-22 and is designed to provide a complete overview for any investor in Japanese retail/consumer markets.
FY2021-22 proved a rebound year for retailers at the sector level. But on a company by company basis, there has been radical divergence between the best and the rest. 
We look at the reasons for this divergence and the implications for Japanese retail and consumer firms in the years ahead.


Japanese Retailing 2021-22: What's Really Going on and What's Next?

<ul>
<li>Results for FY2022-23 provide a snapshot of winners and losers in Japan's retail sector.</li>
<li>The data shows a big improvement in performance for retailers with sales of ¥250 billion or more and the outlook is positive for most, particularly for profits.</li>
<li>This also means that market concentration is intensifying, particularly in sectors like drugstores but also now in supermarkets. We highlight the winners in each sector.</li>
</ul>


Results for FY2022-23 provide a snapshot of winners and losers in Japan's retail sector.
The data shows a big improvement in performance for retailers with sales of ¥250 billion or more and the outlook is positive for most, particularly for profits.
This also means that market concentration is intensifying, particularly in sectors like drugstores but also now in supermarkets. We highlight the winners in each sector.


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>This morning the Nikkei <a href="https://www.nikkei.com/article/DGXZQOUC234HG0T20C25A5000000/" target="_blank" rel="noopener">reported</a> shareholders of <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> and <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a> approved their Merger. Activists opposed but it was going to be close at best.</li>
<li>As <a href="https://www.smartkarma.com/insights/japan-activism-m-a-thinking-about-positioning-around-the-tsuruha-welcia-vote" target="_blank" rel="noopener">expected</a>, Welcia shares popped, and the spread converged to 2% with Tsuruha falling back to just below ¥11,400. Some of this is unwind of speculative interest in Tsuruha.  </li>
<li>The new yuhos are out, which shows roughly where we stand (as of end-Feb, and some updates). Now the trade is NEWCO vs Aeon's interest and NEWCO vs World.</li>
</ul>


This morning the Nikkei reported shareholders of Welcia Holdings (3141 JP) and Tsuruha Holdings (3391 JP) approved their Merger. Activists opposed but it was going to be close at best.
As expected, Welcia shares popped, and the spread converged to 2% with Tsuruha falling back to just below ¥11,400. Some of this is unwind of speculative interest in Tsuruha.  
The new yuhos are out, which shows roughly where we stand (as of end-Feb, and some updates). Now the trade is NEWCO vs Aeon's interest and NEWCO vs World.


[Japan Activism/M&A] - Shareholders Approve Tsuruha/Welcia Merger - Now It's Partial Offer+Synergies

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>Leading proxies recommend that <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a> shareholders vote against the Tsuruha/<a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> merger on 26 May.</li>
<li>The share exchange terms favour Welcia over Tsuruha shareholders. The Tsuruha vote will be close but likely to be approved. Long Tsuruha is the trade, irrespective of the vote.  </li>
<li>For a vote pass, you are long synergies and a likely partial offer bump. For a fail, you are long an undemanding multiple and the optionality of a new bid.      </li>
</ul>


Leading proxies recommend that Tsuruha Holdings (3391 JP) shareholders vote against the Tsuruha/Welcia Holdings (3141 JP) merger on 26 May.
The share exchange terms favour Welcia over Tsuruha shareholders. The Tsuruha vote will be close but likely to be approved. Long Tsuruha is the trade, irrespective of the vote.  
For a vote pass, you are long synergies and a likely partial offer bump. For a fail, you are long an undemanding multiple and the optionality of a new bid.      


Tsuruha (3391 JP)/Welcia (3141 JP): Vote Musings

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a> and <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> announced a merger through a share exchange followed by a partial tender offer by Aeon for a 50.90% stake of the merged entity.</li>
<li>The share exchange terms favour Welcia over Tsuruha shareholders. The Tsuruha shareholder vote is high risk as Orbis, the second-largest shareholder, <a href="https://www.businesswire.com/news/home/20250411005584/en/Orbis-Statement-on-Proposed-Merger-Between-Tsuruha-and-Welcia-and-Proposed-Tender-Offer-by-Aeon" target="_blank" rel="noopener">intends to vote NO</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a>’s follow-up partial offer for Tsuruha is unattractive compared to its previous offer for the Oasis stake, peer multiples and premium to the undisturbed price.   </li>
</ul>



Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) announced a merger through a share exchange followed by a partial tender offer by Aeon for a 50.90% stake of the merged entity.
The share exchange terms favour Welcia over Tsuruha shareholders. The Tsuruha shareholder vote is high risk as Orbis, the second-largest shareholder, intends to vote NO. 

Aeon Co Ltd (8267 JP)’s follow-up partial offer for Tsuruha is unattractive compared to its previous offer for the Oasis stake, peer multiples and premium to the undisturbed price.   


Tsuruha (3391 JP): Welcia (3141 JP) Share Exchange and Aeon (8267 JP) Partial Offer Unattractive

Japan

MatsukiyoCocokara & Co. operates drug store chains. The Company retails medicines, cosmetics, health foods, beauty care products, and other products. MatsukiyoCocokara & also operates supermarkets and home centers.

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MatsukiyoCocokara (3088 JP)

Japanese Retailing 2021-22: What's Really Going on and What's Next?

There is increasing divergence between the winners and losers in Japanese retailing and the following in-depth review looks at performance in the...

Michael Causton

Japan's Best Performing Retailers

There were strong improvements in both sales and profits for leading retailers last year and the following insight looks at the main winners and...

Michael Causton

[Japan Activism/M&A] - Shareholders Approve Tsuruha/Welcia Merger - Now It's Partial Offer+Synergies

Nikkei has reported the Welcia/Tsuruha merger is approved. Neither company has confirmed yet. But this means analysts start to look at synergies,...

Travis Lundy

Tsuruha (3391 JP)/Welcia (3141 JP): Vote Musings

The Tsuruha vote on 26 May will be close but likely to be approved. Long Tsuruha is the trade, irrespective of the vote.

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japanese Retailing 2021-22: What's Really Going on and What's Next?

There is increasing divergence between the winners and losers in Japanese retailing and the following in-depth review looks at performance in the...

Michael Causton

Japan's Best Performing Retailers

There were strong improvements in both sales and profits for leading retailers last year and the following insight looks at the main winners and...

Michael Causton

[Japan Activism/M&A] - Shareholders Approve Tsuruha/Welcia Merger - Now It's Partial Offer+Synergies

Nikkei has reported the Welcia/Tsuruha merger is approved. Neither company has confirmed yet. But this means analysts start to look at synergies,...

Travis Lundy

Tsuruha (3391 JP)/Welcia (3141 JP): Vote Musings

The Tsuruha vote on 26 May will be close but likely to be approved. Long Tsuruha is the trade, irrespective of the vote.

Arun George

Tsuruha (3391 JP): Welcia (3141 JP) Share Exchange and Aeon (8267 JP) Partial Offer Unattractive

Unsurprisingly, Orbis has opposed the transactions, as the terms of the share exchange and partial offer are unfavourable for Tsuruha shareholders....

Arun George