November 25, 2025

Japanese M&A Hits Record $215 Billion, Taking Over 10% of Global Deals

Corporate Restructuring and Overseas Expansion Drive Historic Surge

Mergers and acquisitions led by Japanese companies reached an unprecedented level in the first half of 2025. According to data from LSEG, domestic and cross-border deals in which Japanese firms were buyers totaled $214.8 billion, about 31 trillion yen, 3.6 times higher than a year earlier and the highest figure for any six months since records began in 1980.

Japan’s share of global M&A exceeded 10 percent for the first time in 34 years, matching levels last seen during the late bubble era. The surge reflects a growing push to restructure corporate groups, improve capital efficiency, and secure overseas growth opportunities. Global M&A activity also expanded, rising 30 percent year on year to $1.98 trillion. Asia Pacific excluding Japan saw acquisitions jump 90 percent to $377.5 billion, while U.S. deals grew 9 percent to $830.9 billion. Europe posted only marginal growth of 1 percent to $345.7 billion.

Parent–Subsidiary Buyouts and Carve-Outs Accelerate

A wave of large-scale corporate reorganizations is fueling Japan’s renewed prominence in M&A. Toyota Motor Corporation and its group companies announced plans to acquire Toyota Industries in a tender offer valued at about 4.7 trillion yen. NTT is also moving to take its listed subsidiary, NTT Data Group, private in a transaction valued at around 2 trillion yen. These deals highlight mounting pressure to unwind parent–subsidiary listings and cross-shareholdings that have long characterized Japan’s corporate structure. Activist investors are increasingly urging companies to deploy management resources more efficiently and raise corporate value.

Akihiko Ogino, president of Daiwa Securities, which advised on the NTT Data transaction, notes that the number of listed companies in the United States and Europe has fallen by about 40 percent from its peak. He expects Japan to follow a similar path, with more management buyouts and related transactions aimed at improving returns on capital. Carve-outs are also on the rise. Recof data show that the number of cases climbed 30 percent to roughly 270 in the January to June period, the highest level in 17 years. Japan Tobacco plans to sell its pharmaceutical business to Shionogi for about 160 billion yen as it refocuses on its core tobacco operations.

Strong Balance Sheets Give Japanese Firms an Edge

Japan’s major corporations now hold their third-largest cash reserves since the fiscal year ended in March 2008, boosting their acquisition capacity. Domestic banks are also playing a key role, with the three megabanks, including Sumitomo Mitsui Banking Corporation, extending around 2.8 trillion yen in loans to support the privatization of Toyota Industries. In contrast, deal momentum in the United States has been uneven. While regulatory conditions were expected to become more favorable, uncertainty following the reintroduction of reciprocal tariffs and a slowdown in China’s economy has led many U.S.-related transactions to be put on hold, according to investment banking sources. With acquisition financing in the United States heavily dependent on leveraged loans, deteriorating market sentiment can quickly dampen deal activity.

Against this backdrop, Japanese companies are emerging as some of the most aggressive buyers in the global M&A arena.