Orix In Final Talks To Buy Robeco

TOKYO--In what would be the biggest ever acquisition by Japan's top financial services and leasing company, Orix Corp. (8591.TO) is in final talks to buy Dutch asset manager Robeco from Rabobank for about $3 billion, people close to the discussions said Thursday.

An announcement could be made as early as next week, the people said.

The Dutch bank last year started reviewing its business strategy, refocusing its efforts on its more traditional businesses, such as lending to local farmers.

Orix's move would follow a buying spree by Japanese financial institutions of overseas assets and businesses, particularly those put up for sale by European players trying to reinvigorate their balance-sheets.

Helping fuel this desire among Japanese players, who remain relatively unscathed by Europe's debt crisis, is the enticing prospect of being able to expand their businesses overseas through acquisitions and investments as growth at home remains stagnant.

Last year, for example, Japan's No. 2 lender by market capitalization, Sumitomo Mitsui Financial Group Inc. (8316.TO) bought Royal Bank of Scotland Group PLC "s (RBS.LN) aviation leasing business for about $7.2 billion. Meanwhile, Mizuho Financial Group Inc. (8411.TO) acquired Brazilian lender Banco WestLB Do Brasil S.A. from Germany's WestLB AG.

Japan's largest bank, Mitsubishi UFJ Financial Group Inc. (8306.TO), has purchased some business and loan portfolio from RBS over the past few years. In 2010, MUFG bought RBS's project finance team and its loan portfolio worth about GBP3.3 billion in Europe, the Middle East and Africa and, in the following year, the Tokyo bank bought RBS's Australia-based infrastructure advisory business.

Orix has long been active in overseas investments for various businesses far before the financial crisis in 2008.

The company, which listed on the New York Stock Exchange in 1998 and is over 50% foreign-held, also operates in investment banking, life insurance, venture capital, financing real-estate development and is entering niche markets including environment and energy-related businesses.

Orix also has a track record of acquisitions in the U.S. In 2005, it acquired boutique U.S. investment bank Houlihan, Lokey, Howard & Zukin for about Y50 billion to help boost its advisory fee businesses.

In 2010, the firm bought about an 83% stake in Ohio-based Red Capital Group, a top commercial mortgage originator, and also acquired Mariner Investment Group, a leading hedge fund and alternative investment manager based in Harrison, New York.

Orix's President Makoto Inoue said in an interview in 2011 that his company is looking to buy an asset management firm or an investment bank, adding the surging yen at that time has helped his firm ramp up acquisitions abroad.

Dana Cimilluca contributed to this report

Write to Atsuko Fukase at [e-mail] and Kana Inagaki at [e-mail]

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