Japanese firms go full swing on M&A activities

In spite of a business culture traditionally resistant to M&As, the shrinking domestic market has forced Japanese firms to seek alternative ways to grow. With mergers and acquisitions having grown in recent years and about to hit a record high ($240.9 billion in the first half of the year), M&As seem to be the answer and an effective means to expand business opportunities and access new markets.

The latest Mergers & Acquisitions Review by Thomson Reuters shows the major deals announced with some degree of Japanese involvement in H1 2018. Takeda’s acquisition of the biotechnology company Shire plc for about $77 billion not only tops the list, but also represents the largest overseas purchase by a Japanese company in history. The deal, expected to be closed in the first half of 2019, will propel the Japanese pharmaceutical giant Takeda into the top 10 ranking of global drug makers.

The second biggest deal on the list is the merger of T-Mobile and Sprint Corporation, in which the Japanese involvement comes as SoftBank Group Chairman and CEO, Masayoshi Son, who will serve on the board of the new company. SoftBank will own 27 percent of the combined company that is then forecast to have the capacity to rapidly create a nationwide 5G network in the United States.

Led by healthcare and telecommunications as the top target industries, the domestic M&A market more than doubled compared to the same period in 2017 and is expected to continue growing over the course of the next year.