Japan diversified

Recent mergers & acquisitions trends in Japan show a significant increase in deal value and activity. In 2023, Japan’s M&A deal value rose 23%, reaching approximately USD 123 billion according to consultancy Bain. This surge is driven by regulatory and investor pressure to enhance company valuations. The data for 2024 is not available yet, but the number of deals appears to have increased again with significant contributions from private equity. The Japanese government introduced new takeover guidelines, making unsolicited bids easier and encouraging more transactions. One of the M&A opportunities in Japan is to reduce companies’ revenue diversification and make them more focused on one sector. In Japan, just 35% of listed companies have exposure to one sector compared to 55% in the rest of Asia and 67% in the US. More focus can increase efficiency and profitability, potentially boosting market values. At the same time, companies have become more prone to sector-specific downturns.

Source: Jefferies, FactSet, January 2025.