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The Study Group for Issues Relating to Inbound M&A Transactions and Case Studies

In FY2021, the Investment Facilitation Division conducted the “Project for Study and Examination Regarding Measures for Further Promotion of Investment in Japan and Abroad” to consider the current situation and issues surrounding inbound M&A transactions as one of the foreign direct investment methods. The Project found that although the number of inbound M&A transactions was increasing in Japan, inbound M&A transactions in terms of the percentage ratio to the overall foreign direct investment were smaller in Japan than in other developed countries.

To promote inbound M&A transactions, Japan needs not just to make Japanese companies more attractive (e.g., by improving their productivity), but also to make potential M&A target companies/businesses more evident. Particularly important in addressing the latter challenge is to (i) reinforce corporate governance, (ii) optimize management decisions (e.g., through a review of business portfolios), and (iii) disseminate the possible benefits and significance of selling companies or businesses to foreign companies.

This Study Group analyzes the realities and issues regarding M&A transactions with Japanese companies by foreign companies and foreign private equity funds, as well as those regarding post-M&A management, from the viewpoints of (ii) and (iii) above. Based on the analysis findings, the Study Group aims to consider, while taking account of economic security, what kind of case study is helpful for Japanese companies that intend to upgrade their corporate management, such as those reorganizing themselves or parts of their businesses through inbound M&A transactions.

Last updated:2020-07-22