Japanese M&A update: the current state of play
The Japanese M&A market has been experiencing an upward trend in M&A deal volume, reaching over $100 billion in 2021 according to Dealogic, and as countries move out of the pandemic it is expected that Japan will be well-positioned for a M&A boom. Cross-border and outbound M&A transactions have been a big driver of this growth, as Japanese corporates continue to sell off their subsidiaries and acquire companies overseas to transform and diversify their portfolios. However, geopolitical issues continue to impact supply chains, and many Japanese corporates are on a wait-and-see mode before making transactions. Our panel of experts will discuss the opportunity set in the year ahead.
- What will be the future themes and trends driving Japanese M&A in the next 12 months?
- Cross-border M&A: will geopolitical issues impact M&A activity in the region, especially from an execution risk point of view?
- Outbound M&A: Where are companies seeking targets, what will be the opportunities in the pipeline, and where will the challenges lie?
- Will domestic and inbound M&A pick up as on-site due diligence and face-to-face meetings become the norm again?
The growth of ESG, corporate governance and shareholder activism in Japan
Awareness and interest in ESG, corporate governance issues and shareholder expectations has grown in the past year in Japan. Recent reforms in the Code of Corporate Governance as well as TSE updates have prioritised ESG disclosure, prompting companies to move towards decarbonisation and proactively engage in M&A related to climate change. Other reforms in the Code have also placed emphasis on increased board independence as well as gender diversity, and shareholder activists in the region continue to conduct campaigns against a record number of Japanese companies to hold them accountable. Our panel of advisors discuss how best to manage shareholder expectations in the region as well as how to improve corporate governance internally.
- What are some of the new updates to the TSE and corporate governance code that corporates need to be aware of?
- What are some global ESG and corporate governance trends and best practices, for example in regions such as India and Australia?
- What have been the main drivers of shareholder activism and corporate governance in the region in the past year?
- How are companies reorganising their businesses to move towards decarbonisation and enhanced ESG disclosure?
- What are some examples of high-profile activists’ campaigns in Japan in the past year, and how can corporates be best prepared for the future?
Japan M&A into India: investment trends and opportunities
Despite geopolitical issues, Japanese outbound M&A into India has seen several big-ticket deals in the past year, with US$5.6 billion invested across 73 deals in 2021, across various sectors ranging from financial services to start-ups. As both regions begin to emerge from the pandemic, it is predicted that opportunities will only grow due to Japan Inc’s eagerness to acquire outbound assets and consolidate their holdings in Indian affiliates. However, investing in the region comes with its own set of unique regulatory and geopolitical challenges. Our panel of leading advisors share their views on how best to capture opportunities in India.
- What have been the key investment trends in 2022, and what is the outlook for the rest of the year?
- Which sectors are the most attractive to Japanese acquirers? Will we see more venture capital deals?
- What are some of the challenges Japanese acquirers should expect to face when dealing with outbound M&A in India, particularly on the geopolitical side of things?
- Which best practices can Japanese investors borrow from recent acquisitions in India?
Emerging Trends in Domestic M&A, Including Utilization of W&I Insurance to Manage Deal Risks - Panel Discussion between NSSK and Marsh
Transformative M&A: going outbound for new technologies
Last year, Japanese M&A deals in the technology sector were valued at $23 billion according to Dealogic, several which comprised of large outbound deals aimed at transforming and reshaping corporates’ portfolios. The pursuit of transformative M&A deals comes at a time where Japanese corporates have increasingly seen the need to digitalise and acquire new technologies and products to bolster their core businesses domestically. Against this backdrop, our panel of technology experts and corporate executives discuss dealmaking in this sector, and how companies can future-proof their positions by pursuing transformative M&A.
- What factors have been driving the shift towards transformative M&A in Japan?
- Which countries and sectors are top Japanese corporates looking to make transformative M&A investments?
- What are some examples of recent acquisitions made by large corporates such as Hitachi, and how have these purchases impacted their portfolios?
- Which sub-sectors are seeing the most interest, such as IoT, supply chain management solutions and other digital solutions?
Japanese private equity’s growing importance in the M&A market
As Japanese corporates continue to sell their non-core assets and subsidiaries in a bid to restructure their portfolios, private equity firms have become an important player in the M&A space as ready buyers of divested assets, with Japanese buyout funds particularly active in this area. With funds sitting on substantial amounts of dry powder and small to mid-sized company divestitures on the rise, the outlook for the market looks promising. Our panel of leading global and regional GPs share their views on the opportunities and challenges in the market.
- What have been some notable deals in the past 12 months, and what is the outlook for the rest of 2022?
- Which sectors and transaction sizes have GPs been focusing on?
- How has the PE industry cemented its reputation as an eager buyer of business restructurings, and will their significance in the Japanese M&A market only grow with time?
- Is the private equity market in Japan in danger of overheating?
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