The Tostem–INAX merger and the holding company (2001)

What was actually inside a union called mutual affection

The combination was described as mutual affection, but the two sides did not want it equally. INAX held 28% of the sanitary-ware market against TOTO’s 64% and could not draw a future on its own; it was chairman Ina Terumitsu who picked up the telephone. Tostem, for its part, had a founder who had spent a decade proclaiming a ¥1 trillion company, a goal put at risk as housing starts fell from 1.63 million to 1.2 million. The conditions for the deal lay exactly where a seller’s dead end and a buyer’s impatience met in the same year.

The ¥1 trillion took until the year to March 2006 to arrive, from ¥833.5 billion in the year to March 2002 — nearly five years, not the year after the merger. Even so, Ushioda built into the holding company a mechanism by which he, as sole shareholder, could examine the presidents of some thirty subsidiaries, seeking the form of governance in the head offices of the old zaibatsu. The order was to make the vessel first and put the companies into it. The name changed to JS Group and the operating company became LIXIL, but the holding-company mechanism remained.