Yamada Holdings "Merger with Edion: current considerations" (Neutral) Kazahaya

Research evidence excerpt

Yamada Holdings "Merger with Edion: current considerations" (Neutral) Kazahaya

le combined

basis are more than twice the level of sales at the other major competitors.

Growth opportunities in the renovation business

Among the major companies in the consumer electronics retail industry, Yamada and

Edion in particular have been strengthening their renovation businesses. In FY3/26,

renovation sales (housing equipment category at Edion) totalled ¥66.2bn at Yamada

and ¥61.6bn at Edion, for a simple combined total of ¥127.8bn. For reference, Sekisui

House (1928) recorded renovation business sales of ¥187.9bn in FY1/26, while Sekisui

Chemical (4204) posted renovation business sales of ¥114.9bn in FY3/26. If the

integration can be achieved, renovation sales at the new company post-integration

could grow significantly, so we also focus on the growth strategy for the renovation

business.

UBS view

Yamada Holdings ranks first in the consumer electronics retail industry in terms of sales

scale. However, its size has not necessarily translated into superior profitability or

efficiency compared to industry peers, and its market share in the consumer electronics

sector has declined from its peak. Therefore, our focus for the integration between

Yamada and Edion will be on: 1) the timeline of management integration, 2) whether

the further growth in scale resulting from the integration leads to improved corporate

value, 3) how the relationship with Nitori Holdings (9843), which has a business and

capital alliance with Edion and is strengthening its consumer electronics operations (as

of end-March 2025 (link Japanese only) it held 9.75% of Edion’s issued shares excluding

treasury shares) will develop, and 4) whether the management integration of the two