Serial article regarding M&A on NNA (vol.89)

In the previous issue, we reviewed an overview of M&A by Japanese companies in Malaysia in FY2021 and the areas of M&A that are expected to increase in the future. In this issue, we will discuss two M&A deals by Japanese companies announced in 2022.

1. JCB’s investment in a fintech company

On January 13, 2022, JCB announced a capital and business alliance with Soft Space Sdn Bhd (“Soft Space”) of Malaysia, investing approximately US$5 million in Soft Space and granting it a license to issue JCB cards and acquire merchants in Malaysia.

JCB is the only issuer of international credit cards in Japan with a market share of about 30%, second only to VISA which has a market share of about 55% in Japan, and fifth in the world with a market share of about 1%, after VISA, MasterCard, UnionPay Card and American Express.

According to JCB’s press release on 13th January 2022, Soft Space was founded in Kuala Lumpur in 2012 and has created solutions that simplify complex structures in the financial industry and has been implemented by more than 30 financial institutions in 10 countries. In 2018, the company was positioned 66th out of 1,000 high-growth companies in the Asia-Pacific region selected by the Financial Times (UK), and in 2020, it appears to be recognized as one of the fastest-growing companies selected by the International Data Corporation.

Through this partnership, JCB Contactless handling and Soft Space’s various marketing services can be used simply by inserting Soft Space’s application into a smartphone or tablet. In addition, the company plans to provide new marketing solutions to financial institutions in the ASEAN region using its terminals, and to realize business alliances in a wide range of areas beyond the card business. JCB, which has been rather hidden behind VISA and MasterCard in Malaysia, is expected to increase its presence through this alliance.

2.Yoshinoya to Transfer Shares in conveyor-belt Sushi Chain

Yoshinoya announced that on 19th January 2022, its consolidated subsidiary in Malaysia will transfer its 28% stake in Sushi King, a conveyor-belt sushi chain, to Sushi King Holdings, a subsidiary of Texchem Resources which is a listed Malaysian company, for approximately 2.7 billion yen.

Sushi King is the largest conveyor-belt sushi restaurant in Malaysia, with more than 100 outlets throughout the country since its establishment in 1995. In 2014, Yoshinoya invested in Sushi King with the main objective of promoting the exchange of human resources and sharing of know-how at the management level with the Texchem Group. According to Yoshinoya’s press release on 19th January 2022, the share transfer was carried out to optimize the business portfolio, including overseas operations, and to strategically allocate resources to growing businesses. Yoshinoya and Hanamaru Udon stores are closed, but since Asia Yoshinoya International, which provides management guidance to Yoshinoya franchises in Southeast Asia and handles franchisee recruitment, is located in Malaysia, the Yoshinoya brand is expected to return for a third time and new business development is expected in Malaysia in the future.

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