Multi-billion dollar acquisition to pay off disaster debt

2015 is off to a strong start for M&A lawyers, with Japan Post making a $6.5bn bid for Toll Holdings.

Clayton Utz and Japanese firm Nishimura & Asahi acted on behalf of Japan Post, with Andrew Walker and Darryl McDonough leading the Clayton Utz team. Herbert Smith Freehills advised Toll.

According to Herbert Smith Freehills partner Rodd Levy, who was joined by Simon Haddy on the Toll advisory team, the acquisition is timely for the postal company, which is due to be privatised in order to pay off debts from the 2011 Fukushima disaster. 

“The Japanese government has passed legislation requiring the privatisation of Japan Post later this year, and they’re going to use the money to repay debt incurred from the Fukushima disaster,” he said.

 “They are going to float Japan Post and acquiring Toll was meant to add to Japan Post’s attractiveness on a float,” said Levy.  “Toll has a reputation for being very successful in acquiring businesses, so that would give Japan Post a growth platform, where currently Japan Post is focussed inwardly on Japan which is a declining market.”

He predicted that that Australian market will see an increase in foreign investment over the next year. 

“It’s a foreign buyer with very low cost of capital and for them to buy an Australian based business, right now, with the Australian dollar down is a far more attractive proposition than it would have been 12 months ago.  I would expect that we would see more foreign buyers in the Australian market over the next 12 months,” he said.

The acquisition will provide growth to the Japanese postal service, which is aiming to be a leading global logistics player, and comes just months after a Singapore Post subsidiary, Quantium Solutions, announced the acquisition of another Australian delivery group, CouriersPlease.

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