JAPAN Trends and Developments Contributed by: Raku Raku, Gen Takahashi, Yoshihiro Morisato and Taku Matsumoto, Anderson Mōri & Tomotsune
Impact of the TSE reform As stated above, the TSE’s re-categorisation of its market divisions in 2022 has become a strong driver behind growth in M&A deals. In addition, on 25 January 2023, the TSE held a “Council of Experts Concerning the Follow-up of Mar - ket Restructuring” and put forth a strong request for the management and board of directors of listed com - panies with P/B ratios consistently below 1 to “prop - erly identify the company’s cost of capital and capital efficiency, evaluate those statuses and its stock price and market capitalisation, and disclose policies and specific initiatives for improvement and the progress thereof as necessary”. This announcement appears to have accelerated the trend of listed companies with P/B ratios below 1 deciding to go private. At the same time, activist funds are becoming more active in dis - couraging or preventing such delisting activities. Outlook for 2026 New Prime Minister Sanae Takaishi from the Liberal Democratic Party of Japan, which has not held the majority of House seats since 2024, assumed her position on 21 October 2025. While it may not be easy for the Takaishi cabinet to introduce any dramatic new policies, Ms Takaishi is the first-ever female prime minister of Japan, with an initial approval rate of more than 80%, and is expected to continue to encourage M&A activities in the country, despite her general con - servative policy in terms of economic matters.
and only a very few of the limited number of attempted takeovers without consent of listed companies have been successful. However, from the year 2020, there has been a marked increase in the number of takeo - vers without consent. Aside from the role of activist funds, another underly - ing factor is an increase in the number of Japanese listed companies that abolished their anti-takeover plans. This is due to: (i) the majority of Japanese list - ed companies adopting the Corporate Governance Code, which basically encourages dialogue between shareholders and companies and takes a dim view of anti-takeover plans and cross-shareholding; and (ii) an increase in the number of institutional investors sign - ing on to the Stewardship Code, which led them to undertake greater accountability to their clients, and no longer allows them to simply support a company’s management without there being grounds justifying the support. The trend of increasing numbers of takeovers with - out consent appears to have been accelerated by the introduction of the Guidelines for Corporate Takeo - vers. Since their introduction, the management of a target company now must consider more seriously whether an acquisition is desirable from the perspec - tives of enhancing corporate value and the common interests of shareholders, making it difficult to simply turn down proposals from potential acquirers without properly examining their merits.
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