IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

IPOs and Catalysts/Events

Yamada-Edion: The ¥2.5 Trillion Merger that Was Always Coming but Where Are the Benefits?

[Japan M&A] Yamada HD (9831) And EDION (2730) Merger Talks See A Potentially Big Twist

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.

Event-Driven

<ul>
<li>In response to a <a href="https://asia.nikkei.com/business/business-deals/japan-electronics-sellers-yamada-edion-plan-merger-to-create-industry-giant" target="_blank" rel="noopener">Nikkei article</a>, <a href="https://www.smartkarma.com/entities/edion-corp" target="_blank" data-smartkarma-citation="entities:14358:1" rel="noopener">Edion Corp (2730 JP)</a> and <a href="https://www.smartkarma.com/entities/yamada-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:641:1" rel="noopener">Yamada Holdings (9831 JP)</a> confirmed that they are considering a merger, presumably through a share exchange. </li>
<li>The deal is strategically sensible as it would establish Japan’s largest electronics retailer. However, a divestment of stores may be required for antitrust approval.</li>
<li>The plan is long-dated. The lack of controlling shareholders necessitates a “fair” exchange ratio. My estimated Edion/Yamada exchange ratio ranges from 3.87x to 4.35x.</li>
</ul>


In response to a Nikkei article, Edion Corp (2730 JP) and Yamada Holdings (9831 JP) confirmed that they are considering a merger, presumably through a share exchange. 
The deal is strategically sensible as it would establish Japan’s largest electronics retailer. However, a divestment of stores may be required for antitrust approval.
The plan is long-dated. The lack of controlling shareholders necessitates a “fair” exchange ratio. My estimated Edion/Yamada exchange ratio ranges from 3.87x to 4.35x.


Pan Pacific International Holdings (7532 JP)

Edion (2370 JP)/Yamada (9831 JP) Potential Merger to Establish Japan’s Largest Electronics Retailer