Itochu Set to Take Dentsu Soken Private in $1.3 Billion Deal

Itochu is set to take Dentsu Soken private in a $1.3 billion deal, ending its parent-subsidiary listing structure with the Dentsu Group. The trading company plans to acquire nearly 75 million shares of Dentsu Soken, valued at ¥2,880 each, according to a statement released on Monday. The tender offer is expected to commence in early November and conclude by early December.

The deal, conducted through a vehicle owned 80% by Itochu and 20% by its subsidiary IFP, will see Dentsu Soken's parent, Dentsu Group, remain uninvolved and work alongside Itochu to manage the business post-acquisition. Currently holding a 62% stake in Dentsu Soken, Dentsu Group will continue to collaborate with Itochu. If the tender offer is successful, it will be the latest in a series of deals involving Japan's "parent-child listings," which have come under scrutiny from activist investors for being an inefficient use of capital.

One such activist investor, Oasis Management, owns a 5% stake in Dentsu Soken. As part of the acquisition, Dentsu Soken will enter into a business alliance agreement with Itochu Techno-Solutions to collaborate on IT infrastructure due to the increasing demand for AI implementation. Following the acquisition, Dentsu Soken's shares dropped 2.2% to ¥2,855 on Monday morning, while Itochu shares fell 1%, and Dentsu Group's shares fluctuated.