Nomura, Goldman Among Firms Making Cut for Japan Post IPO

Nomura Holdings Inc. and Goldman Sachs Group Inc. were among 15 securities firms shortlisted to manage the initial public offering of Japan Post Holdings Co. as the government embarks on potentially its biggest asset sale.

Mitsubishi UFJ Morgan Stanley Securities Co., Daiwa Securities Group Inc. and Citigroup Inc. were also among the companies that passed the first phase of the selection process, the Ministry of Finance said in a statement today. It plans to select about 10 firms to manage the IPO, slated for next year.

The candidates will have to find ways to divest the postal, banking and insurance giant without disrupting the stock market. Prime Minister Shinzo Abe’s administration hasn’t said how much it expects to raise from the sale, which will help fund reconstruction from the March 2011 earthquake and tsunami. The offering will probably take place in phases and may exceed 4 trillion yen ($38 billion) in total, the previous government’s Postal Reform Minister Mikio Shimoji said in 2012.

The other foreign companies that made the cut are Barclays Plc, JPMorgan Chase & Co., UBS AG and Bank of America Corp., the statement showed. The remaining domestic firms are SMBC Nikko Securities Inc., Mizuho Securities Co., Tokai Tokyo Financial Holdings Inc., Okasan Securities Group Inc., SBI Holdings Inc. and Ichiyoshi Securities Co.

Japan’s government will select the underwriters by the first week of October, a Finance Ministry official said in Tokyo today, asking not to be named in accordance with its policy. Fifteen domestic and six foreign firms applied.

Koizumi’s Legacy

Former Prime Minister Junichiro Koizumi drove efforts to privatize the postal system in the early 2000s. Japan Post was valued at 12.4 trillion yen as of March 2013, according to a Finance Ministry report.

The postal group, which consists of the holding company and its banking, insurance and delivery units, had about 292 trillion yen in assets at the end of June. That’s more than the annual economic output of France, according to data compiled by Bloomberg. It has 177 trillion yen in deposits, the most of any financial institution in the country.

The group also holds 172 trillion yen in Japanese government bonds, the most after the central bank. Japan Post President Taizo Nishimuro repeated last month that the company won’t consider a large revision to its holdings, saying doing so would disrupt financial markets.

Analysts at Citigroup said in June that the group may sell the securities and buy riskier assets such as stocks to boost profitability as it prepares for the share offering.

Japan’s biggest IPO in local-currency terms is the government’s 2.3 trillion-yen sale of a stake in Nippon Telegraph & Telephone Corp. in 1987, according to data compiled by Bloomberg.

Before it's here, it's on the Bloomberg Terminal.