Introduction

In mid-August 1999 global financial markets were jolted when the presidents of three of Japan's largest banks—Industrial Bank of Japan, Fuji Bank, and Dai-Ichi Kangyo Bank—announced plans to combine operations to form the world's largest financial institution, a gargantuan $1 trillion megabank. Given that major banks in Japan not only stand at the head of huge financial groups, but also form the dynamic core of Japan's massive keiretsu industrial and commercial groups, it was clear to observers that this merger would accelerate and deepen the much needed restructuring of Japan's economy that was in its tentative early stages. The breathtaking news was consumed by the market like one of Japan's energy drinks, pushing the Nikkei stock index to heights not seen in years and pushing up the value of the Japanese yen. Suddenly, all eyes were on the future. Change was in the air. Everyone was speculating on which would be the next big Japanese bank or corporation to announce a strategic merger, acquisition, or divestiture.