JAPAN Law and Practice Contributed by: Yohsuke Higashi, Nobuhiko Suzuki and Hiroko Kasama, Mori Hamada & Matsumoto
Mori Hamada & Matsumoto 16th Floor Marunouchi Park Building 2-6-1 Marunouchi Chiyoda-ku Tokyo 100-8222 Japan Tel: +81 3 5220 1800 Email: yohsuke.higashi@morihamada.com Web: www.morihamada.com
1. Transaction Activity 1.1 Private Equity Transactions and M&A Deals in General According to RECOFDATA, the number of Japanese M&A transactions announced in the first half of 2025 was 2,509, an increase of 7.1% compared to the first half of 2024, reaching a record high for the second consecutive year. The total deal volume in the first half of 2025 was also a new record of JPY20.7 trillion, which was approximately 2.1 times the deal volume in the first half of 2024. Despite the uncertainties regarding US tariffs and trade policies, and the weak Japanese yen, we con - tinue to see a steady flow of outbound M&A deals by Japanese companies, which recovered from a rapid decrease in cross-border transactions and a slowdown in outbound M&A deals in 2020 due to the COVID-19 pandemic. The deal volume of outbound transactions by Japanese companies in the first half of 2025 was JPY9.7 trillion, more than a double increase compared to the first half of 2024. The number of M&A transactions in Japanese target companies by financial sponsors increased by 7.6% compared to the first half of 2024. The total deal value increased around 2.5 times to JPY3.3 trillion, compared to JPY1.3 trillion in the first half of 2024. The number and deal value of transactions by foreign financial sponsors were 108 (a 21.3% increase) and JPY2.8 trillion (a 320% increase), respectively. Nota - ble deals announced in 2025 include Bain Capital’s
acquisition of Seven & I Holdings’ superstore business for JPY814.7 billion and Mitsubishi Tanabe Pharma Corporation for JPY510 billion, and the public-to-pri - vate transaction of Fujitec by EQT for JPY407.8 billion. 1.2 Market Activity and Impact of Macro- Economic Factors Active Transactions and Macro-Economic Factors In response to the Japanese government’s policy to reduce the number of listed companies that are subsidiaries of listed parents, the last few years have seen an increasing number of domestic deals where the parent of a listed subsidiary either buys out the subsidiary or sells its holdings in the subsidiary to a third party. In addition, Japan has seen a number of corpora - tions reorganising their businesses to improve capital efficiency, in response to increasing pressures from investors and the Tokyo Stock Exchange to focus on the cost of capital and the return on equity. Certain Japanese companies have sold their non-core busi - nesses in order to refocus their resources on future growth areas to ensure long-term sustainable success, generating value for shareholders and contributing to the wider society. As a growing number of Japanese companies adopt the strategy of selling unprofitable sectors of their business portfolio and acquiring new businesses to ensure sustainable growth amid the rapidly changing business environment, this trend of deals driven by the need to change or diversify busi - ness portfolios looks set to continue.
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