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Legendary Japanese Entrepreneur Quits Post - 2003-03-07

McDonald's-Japan has undergone a management shake-up, with Chairman and Chief Executive Den Fujita announcing his resignation.

Seventy-seven-year-old Mr. Fujita, who built Japan's largest fast-food empire during the past 32 years, will step down at the end of the month. The company says the post will remain vacant for now. Mr. Fujita's son Gen will also step down as a company director.

Why Mr. Fujita stepped down was not revealed, although analysts noted that his departure follows the restaurant chain's first reported loss in three-decades.

Forbes magazine ranked Mr. Fujita as one the world's 200 richest people in 2001, the year his company first sold McDonald's-Japan shares to the public. At that point, his family wealth totaled $2.6 billion.

U.S. drug maker Merck has purchased Tokyo-based Banyu, which makes antibiotics and heart drugs. Merck previously owned 51 percent of the company, and has now bought all remaining shares. The move is considered vital to Merck's strategy of improving sales in Japan, the world's number-two market for medicine, after the United States.

Banyu now becomes Merck's biggest subsidiary outside of the United States. Shigeru Mishima, pharmaceuticals analyst for investment bank ING Barings, explained that Merck and its rivals are all trying to expand their share of Japan's market to compensate for a slow-down in other markets. "It is obvious that Merck needed to do something in Japan to complete fully with its global competitors, to compete fully with Pfizer and Glaxo. Merck needed to have full control of Banyu," he said.

Japan's new budget bill has received Parliament's approval, but is likely to generate controversy. While public spending remains virtually unchanged, the new budget requires record borrowing - compensating for low-tax revenues that have resulted from the poor economy.

To finance the national budget, the government will issue more than $300 billion in bonds, 21-percent more than was required for the current year's budget. All that debt is a heavy burden for Japan, which is already the most heavily indebted among the major world powers.