January 5, 2023

The Number of M&A Related to Japanese Companies in January-December 2022 Reached a Record High of 4,304

In addition to an increase in the number of acquisitions of Japanese companies by domestic and foreign investment companies, the number of business successions also grew. On the other hand, the number of M&A cases worldwide is declining against the backdrop of higher interest rates in Europe and the US, which may affect domestic M&A in 2023.

The number of acquisitions of domestic companies by domestic and foreign investment firms increased by 3% from the previous year to 1,071, the highest number since 1998. The number of business succession cases exceeded 700, accounting for slightly under 20% of the total.

The total value of M&A overall was down 32% to 11,435.6 billion yen, the first decline in two years. The value of acquisitions of foreign companies by Japanese companies dropped by half to 3,474.3 billion yen, while the value of investments between Japanese companies increased by 26% to 4,005.9 billion yen. It was because there were fewer large projects compared to 2021. The value of acquisitions of domestic companies by foreign companies also decreased by about 40% to 3,955.2 billion yen.

Investment firms were active in "carve-out" deals, which divested non-core businesses and subsidiaries. The largest M&A related to a Japanese company was the Tender Offer of Hitachi Transport System by the US investment fund KKR, with a purchase price of approximately 670 billion yen. The parent company, Hitachi, Ltd., began reorganizing the group by selling its listed subsidiaries.

In August, Olympus announced the sale of its scientific business, which handles industrial microscopes and other products, to U.S.-based Bain Capital. The sales exceeded 400 billion yen, and the company will concentrate its business resources on its medical device business, such as endoscopes. Amid the recovery from the COVID-19 pandemic, companies are rushing to select and focus their businesses.