Morgan Stanley
From muck comes brass, as the saying goes, and the MUFG-Morgan Stanley joint venture in Japan proves that axiom better than most.
Flashback to the Lehman Brothers-derived chaos of a decade ago and Morgan Stanley was on its knees, with US banks collapsing around it. MUFG stepped up with a $9 billion bailout; 10 years on, that looks like chump change for the Japanese. That stake has since tripled in value, Morgan Stanley today makes up around 20% of MUFG’s profits and the duo’s clever joint venture in Tokyo repeatedly tops Japan’s investment banking league tables. And 2018 has been no exception.
Such is the tightness, indeed the effectiveness, of how MUFG and MS work together in Japan, we’ve thought it best to take these two awards together. Examine any big deal in Japan over 2018 and there would be a good chance someone from MUFG-Morgan Stanley was sitting alongside.
The duo’s deal roster this year reads pretty much like Japan’s: the sale in May of Anglo-Irish biopharma group Shire PLC to Takeda Pharmaceutical for $81.5 billion, the third-largest takeover ever in Britain and Japan Inc’s largest-ever acquisition; the $60 billion merger of SoftBank’s US telco Sprint with Deutsche Telekom’s T-Mobile; Bain Capital and SK Hynix’s $18 billion purchase of Toshiba Memory in June; the $13 billion integration of Chubu Electric and Tepco’s energy businesses into Jera in February; Sony’s $3.7 billion acquisition of EMI Music from Mubadala Investment in June. And that’s just M&A.
The pair also did myriad fund-raisings and IPOs; you name it, they seemed to be running books for Japan Inc’s most prominent corporates.
On IPOs, the $1.2 billion TSE listing in June of Mercari, the biggest non-US float of an app-driven business, was a standout. The stock soared 77% on debut on the Tokyo Stock Exchange’s ‘market of the high-growth and emerging stocks’ AKA ‘mothers.’
Thanks to its MUFG tie-up, Jonathan Kindred’s Morgan Stanley Japan has indisputably become the best-connected, most-active and highest-profile foreign bank in the country.
As 2018 drew to a close, SoftBank’s Masayoshi Son signed up Nomura, Mizuho and SMBC, Deutsche Bank, Goldman Sachs and JPMorgan to handle his blockbuster $21 billion SoftBank telecoms IPO.
SoftBank has been a gift for Japanese investment banks, generating annual fees upwards of $300 million in recent years, and a good amount has gone into MUFG Morgan Stanley’s coffers. But, notably, MUFG Morgan Stanley passed on this deal.