Mizuho Aims to Support More Strategic Deals for Mid-Cap Firms

04 Jul, 2024

Mizuho Aims to Support More Strategic Deals for Mid-Cap Firms

Mizuho Financial Group is targeting Japan's mid-cap companies to increase lending and advisory services, as more firms consider buyouts and strategic options. Many mid-cap companies face stagnant growth and low price-to-book ratios, prompting Mizuho Bank's CEO, Masahiko Kato, to offer growth strategies and essential services for those interested in business acquisitions or asset sales. While blue-chip companies dominate headlines, smaller firms outnumber them and are starting to outperform in the stock market. These firms are under pressure from policymakers to enhance stock valuations, including through mergers and acquisitions.

Mizuho has a dedicated team for small- and medium-sized enterprises, which has grown from seven to about 70 members. The volume of deals by Japan's mid-cap companies rose 55% in the first half of the year to $19.7 billion. These companies' shares are outperforming the Nikkei stock average, driven by government pressure to improve corporate governance and rising activist investor activity. Activists have made around 100 investments in Japanese firms this year, with shareholder proposals at record highs, leading to an increase in companies going private. Mizuho sees opportunities in buyout financing, advising on carve-out sales, and other strategic actions, while also expanding business in Saudi Arabia and India.