Although the Japanese economy is suffering just as much as others in the current economic downturn, its conglomerates remain relatively strong with a number of them boasting impressive balance sheets and, perhaps more importantly, the cash and appetite for overseas acquisitions.

So much is evident in the US$211m investment by Japan Uranium Management Inc (JUMI) in Uranium One, a Canadian-listed producer and marketer of uranium. JUMI is a consortium established by three Japanese companies - Toshiba Corporation, Tokyo Electric Power Company and the Japan Bank for International Cooperation - as a special purpose entity in British Columbia, Canada. The group has agreed to subscribe to a new share issue of 117 million shares in Uranium One, a holding of about 19.95%. Upon completion, Tokyo Electric and Toshiba will each hold 40% of JUMI's shares, and the Japan Bank for International Cooperation will hold 20%.Baker & McKenzie partners Anne Hung (Tokyo), Roslyn Tom (New York) and Nurhan Aycan (Toronto) acted for JUMI on the deal.

Stephen Bohrer, a counsel at Japanese 'big four' firm Nishimura & Asahi, says the scene is set for more of the same throughout 2009. "The huge inbound investment in Japan that has been occurring over the last couple of years means that there are a number of Japanese companies with a lot of cash on their balance sheets. They are realising that now is perhaps a once-in-a-business-cycle opportunity to snap up some companies that otherwise would have been prohibitively expensive."

But price is not the only issue. The relative strength of the Yen coupled with the limited opportunities for growth that exist in Japan mean that such deals are a viable way to diversify their interests globally. "A lot of the transactional activity we're seeing at the moment is a result of Japanese companies wanting to extend overseas and this about them being able to support their growth going forward. There may be no comparative cost advantage for them going overseas but, strategically, it's vital for their survival."