JAPAN Trends and Developments Contributed by: Takeshi Iitani, Reid Monroe-Sheridan, Takahito Fujii and Akira Kawashiro, southgate
Delisting, therefore, has become an attractive option for companies seeking to alleviate those burdens. In one representative deal, outdoor goods manufac - turer Snow Peak went private under an MBO with Bain’s support in April 2024. Spurred by heightened interest in camping and hiking during the COVID-19 pandemic, Snow Peak’s value peaked in 2021 before its financial performance began to decline in 2023. The MBO was designed to grant the company more operational flexibility and strengthen its overseas business in response to falling profits. Another recent example is Hisamitsu Pharmaceutical’s MBO decision announced in January 2026. The company acknowl - edged the rising costs and regulatory burdens associ - ated with maintaining its listing and stated that going private would enable it to pursue necessary medium- to long-term strategic initiatives, including overseas expansion and business transformation, without being constrained by short-term market evaluations. MBOs have also gained traction as a means of coun - tering hostile takeover bids, as in the case of Seven & i Holdings. In November 2024, the company announced that it was considering an MBO to fend off Alimenta - tion Couche-Tard’s highly publicised takeover bid. In response to acquisition pressure, the founding family of Seven & i explored a large-scale MBO as a defen - sive strategy, seeking to partner with external inves - tors, including Thailand’s Charoen Pokphand Group. The proposed transaction was reportedly valued at approximately USD58 billion. Although the MBO did not proceed, the potential acquisition underscores the appeal of MBOs for other Japanese businesses like Seven & i with influential founding families, which may drive further MBO activity in the future. The proliferation of MBOs, however, has also evoked growing concern that certain deals allow management to acquire target companies at unfairly low prices at the expense of minority shareholders. For instance, Taisho Pharmaceutical Holdings attracted criticism for an MBO announced in November 2023 that allowed a company led by a member of the founding family to acquire Taisho for a share price below the company’s per-share book value. The buyout led certain minor - ity shareholders to challenge the deal with the Tokyo District Court: Hong Kong-based activist fund Oasis Management argued that the tender offer price did
not reflect the value of their holdings, while US-based hedge fund Curie RMB Capital argued that the tender offer price was inappropriately low and exercised its appraisal rights through court action. Prompted by these and similar shareholder concerns, the Tokyo Stock Exchange revised its Code of Cor - porate Conduct (effective 22 July 2025) to strengthen oversight of MBOs. The revised rules require an inde - pendent special committee to assess: • whether the transaction enhances corporate value; • whether the terms are fair; and • whether adequate procedures were followed. They also mandate enhanced disclosure of valuation assumptions and require listed companies to maintain an effective investor relations framework. By creating barriers to going private at low prices, these revisions are designed to reduce the risk of undervalued MBO transactions. Management succession and M&A The succession of management rights in privately held companies, especially SMEs, has become pro - gressively problematic for the Japanese economy as founders retire or depart their companies without leav - ing an internal successor. Private equity funds and other investors are seeking out such companies as opportunities for acquisitions, which offer a solution for the transition of business ownership. One example is Bain’s acquisition of a majority stake in Red Baron, a well-known privately held company specialising in the sale of used motorcycles. When the founder passed away in 2023, Red Baron lacked an internal succes - sor and the founding family turned to Bain for help. In October 2024, Bain acquired Red Baron for nearly JPY100 billion (USD694 million), while members of the founding family remained shareholders. The continu - ing phenomenon of succession issues may galvanise more privately held and family-owned companies to turn to M&A going forward. In April 2025, METI estab - lished a study group on SME M&A market reform to strengthen policy support for succession-driven SME M&A. In August 2025, the study group published its interim report outlining concrete reform measures to enhance the quality and transparency of the SME
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