Japan Stocks Rise on News of Mega Merger

123jump.com Staff
29 Dec, 2008
New York City

Japan stocks rose on rumors that Mitsui Sumitomo Insurance Group Holdings, Aioi Insurance Co. and Nissay Dowa General Insurance Co. might merge to create the country

[R]5:00AM New York, 7:00PM Tokyo - Merger and acquisitions push Tokyo higher.[/R]

Japan stocks rose buoyed by optimism on news Mitsui Sumitomo, Aioi Insurance Co. and Nissay Dowa are in merger talks to create the country's biggest non-life insurer.

Reports that Elpida Memory is also in merger discussions with Taiwanese chipmakers further strengthened market sentiment.

Market Sentiment

In Tokyo trading Nikkei 225 index rose 0.1% or 7.65 to 8.747.17, and the broader Topix Index rose by 8.19 points to 854.77.

In the first section of the Tokyo Stock Exchange 12.4 billion shares worth 741 billion yen were traded and in the second section 298 million shares valued at 2.5 billion yen changed hands.

Of the Nikkei 225 index stocks, 128 rose, 70 declined, and 27 were unchanged. Sanyo Electric led gainers in the index shares with a rise of 15.8%.

Mitsui Sumitomo, Aioi Insurance Co. and Nissay Dowa to Merge

Bloomberg News reported today that sources indicate that Mitsui Sumitomo Insurance Group Holdings, Aioi Insurance Co. and Nissay Dowa General Insurance Co. are currently discussing a possible merger that will create the country's largest non-life insurer with a net premium revenue of 2.7 trillion yen.

According to the report, the companies might merge during the second half of 2009.

The merger will also create Japan's largest casualty insurer by premiums.

Car and fire insurance has been hit by plummeting automobile and housing sales, while reduced securities holdings has adversely affected casualty insurers and other financial institutions.

Aioi is one-third owned by Toyota Motor Corp and Nippon Life Insurance Co holds 35.4% equity in Nissay Dowa.

Lotte Holdings Acquires Mary Chocolate Co.

Nikkei News reported today Lotte Holdings Co. has completed the acquisition of chocolate maker Mary Chocolate Co. in order to boost its market share.

Gainers & Losers

Sanyo Electric led advancers in the Nikkei 225 index shares with a rise of 15.8% followed by increases in Nitto Boseki Co. of 9.4%, in Mitsui Sumitomo of 8.3%, in NEC Corp. of 7.5%, and GS Yuasa Corp. of 7.5%.

Mitsui Sumitomo rose on news that the company is currently in merger talks. Other insurance companies gained as well. Sompo Japan Insurance soared 7.2% and T&D Holdings jumped 7.1%.

Inpex increased 6.4% as crude oil prices edged up $2 to $37.7 per barrel.

Mitsubishi Paper led decliners in the Nikkei 225 index shares with a fall of 5.4% followed by losses in Credit Saison Co. of 4.2%, in Nikon Corp of 3.7%, in Fast Retailing of 3.5%, and Citizen Holdings of 3.1%.

Mitsubishi fell on rising oil prices. Oji Paper dropped 2.4%.

Company News

Nissan, NEC Corp to Invest 100 billion yen for Lithium Iron Batteries

Nikkei News reported today that Nissan Motor Corp. and NEC Corp. is expected to invest 100 billion yen to manufacture large-capacity lithium ion batteries to equip 200,000 electric and hybrid vehicles a year in 2011.

Elpida Memory in Talks with Taiwanese Chipmakers

Bloomberg News reported today that Elpida Memory chief executive officer Yukio Sakamoto said in an interview on Friday last week the company is currently in merger talks with Taiwanese chipmakers- Powerchip, Rexchip Electronics Co. and ProMOS Technologies Inc.

Economists say if successful the merger of the companies will be able to rival Samsung Electronics.