Nomura Holdings Inc. of Japan and London-based Rothschild group joined their efforts in merger-and-acquisition advisory services, inspiring optimism that the number of Japanese companies engaged in cross-border deals will grow in number.

The agreement is designed to help Nomura Securities, the brokerage unit of Japan’s largest investment bank, Nomura Holdings, introduce its Japanese corporate clients to potential acquisition targets in Europe, where Rothschild has a large network and a famous brand name. Similarly, Rothschild will use the relationship to help its clients find investment possibilities in Japan, the world’s second-largest economy behind the U.S., the Wall Street Journal reported on February 16.

Many brokerage firms expect Japanese companies to start investing abroad in businesses.

Privately held Rothschild is one of the world’s top 10 M&A advisers. Last year, it advised on global deals of $232 billion, making it the eighth most-active bank in terms of deal value, according to data tracker Thomson Financial. Rothschild advised in the last year’s merger of Franco-German pharmaceutical company Aventis SA and drug maker Sanofi-Synthelabo SA of France; the merged company is now known as Sanofi-Aventis SA.
Rothschild’s reputation could help Nomura that has seen the value of its deal flow remain relatively flat even as its competitors gain ground in advisory services in its home market. The investment bank advised on $19.7 billion of announced deals in 2004, making it the fifth-largest adviser in the Japanese market, according to Thomson Financial.

Other Japanese brokers also have tried to promote their businesses through alliances. Japan’s No. 2 brokerage firm by revenue, Daiwa Securities Group Inc., has tried to strengthen its ties with corporate Japan by making an alliance with the country’s No. 3 bank by assets, Sumitomo Mitsui Financial Group Inc.