Japan Post Holdings has officially announced its intent to acquire Tonomura Holdings, marking a significant move to bolster its logistics capabilities amid increasing operational challenges.
On February 26, Japan Post Holdings reported through its wholly-owned subsidiary JWT, indicating they would conduct a tender offer (TOB) to acquire all shares of Tonomura Holdings, which is publicly listed on the Prime Market of the Tokyo Stock Exchange. The tender offer is set to occur from February 27 to April 10, with each share being offered at 10,200 yen. The total estimated acquisition cost stands at approximately 926 billion yen, with Japan Post set to invest around 750 billion yen.
Tonomura Holdings, based in Takaoka City, Toyama Prefecture, is well-established in the logistics industry, providing truck transportation and warehouse services across Japan. The acquisition aims to not only expand the operational scale and improve profitability but also to create synergies between the logistics networks of both companies.
The positioning of Tonomura Holdings within the Japan Post Group is expected to lead to enhanced operational efficacy. "We believe we can create synergistic effects by advancing operations together as there is little corporate logistics competition," stated Japan Post Executive Officer Yoshinori Ayaki during the online press conference.
According to company reports, Tonomura's financial performance showed revenues of 142.1 billion yen for the fiscal year ending March, but rising fuel and labor costs led to a 17% decline in operating income. This acquisition is viewed as timely and necessary for Japan Post as they aim to stabilize their logistics segment, which encountered over 60 billion yen in losses last fiscal year due to the pandemic’s impact and market changes.
The tender offer also plans for Tonomura's current management team to continue leading the company post-acquisition, ensuring continuity and the retention of valuable institutional knowledge. Key figures such as CEO Kazuo Takada and Directors Kazuya Takada and Katsuaki Sato currently hold significant shares through TM LLC, which will transition under Japan Post's control following the acquisition.
Notably, Japan Post's strategy is set against the backdrop of upcoming regulatory changes affecting the industry, namely the looming "2024 Problem" which establishes new limits on truck drivers' working hours. This has raised concerns over labor shortages and operational costs within the logistics sector. Japan Post intends to address these issues through shared resources and combined logistics capabilities with Tonomura Holdings.
The move is expected to redefine Japan Post's operational capacity and scale, aligning with the broader goals of enhancing service offerings and creating value for customers across the nation. With the recent acquisition push, Japan Post is signaling its commitment to adapt to the shifting logistics environment and emerge resilient amid heightened competition and economic pressures.
While Japan Post has faced challenges with its traditional postal services amid rising digital communication channels, this acquisition aligns with their strategic pivot to reestablish their presence and competitiveness within the logistics domain, aiming for broader market penetration and improved service efficiencies.
The full acquisition of Tonomura Holdings is poised to not only strengthen Japan Post’s logistics capabilities but also to set the foundation for future growth and innovation within the industry.