TOKYO (Reuters) - Japan Post Holdings (6178.T) is considering buying Nomura Real Estate Holdings (3231.T) in a bid to make real estate operations its new earnings pillar, a source familiar with the matter said on Saturday.
One option for the purchase will be for Japan Post to acquire a majority stake in Nomura Real Estate through an open tender, and the deal will likely be several hundred billions of yen (several billion dollars) in size, the source said.
Japan Post has entered unofficial talks with Nomura Holdings (8604.T), a major shareholder of Nomura Real Estate, on the potential deal, said the source, who declined to be identified.
There still is a possibility that Japan Post and Nomura Real Estate will opt for a capital alliance, rather than an outright acquisition, the source also said.
The possibility of Japan Post buying Nomura Real Estate was first reported by public broadcaster NHK on Friday.
Following the NHK report, Japan Post said on its website: “We are exploring various possibilities regarding new capital and business alliances and will make an announcement promptly once matters that should be made public are finalised.”
The timing of the acquisition, if that path were chosen, could raise eyebrows because Japanese companies have stunned investors recently with losses on M&A deals that have turned sour, which is raising questions about the quality of their due diligence.
Last month, Japan Post, which is 80 percent state-owned, announced a $3.6 billion writedown on its purchase of Australian logistics firm Toll Holdings Ltd.
That writedown saw Japan Post join the likes of Toshiba Corp (6502.T) in high-profile foreign takeover flops.
Japan Post’s business spans from banking and insurance to parcel delivery, but limited growth in its domestic market has led the company to commit to growth through acquisitions.
Reporting by Takaya Yamaguchi; Writing by Kiyoshi Takenaka; Editing by Robert Birsel