July 15, 2020
The Small and Medium Enterprise Agency (SMEA) published the “Comprehensive Package of Measures for Supporting SMEs in Business Succession to Third Parties” on December 20, 2019, and in doing so, upheld a goal that the public and private sectors should unite their efforts and encourage SMEs with no business successors to transfer their businesses to third parties. Under the package, SMEA will open a call for M&A platform businesses which are willing to collaborate with Support Centers for Smooth Business Succession (hereinafter referred to as the “Centers”).
1. Outline of the package
SMEA published the Comprehensive Package of Measures for Supporting SMEs in Business Succession to Third Parties on December 20, 2019, aiming to encourage aging owners of SMEs that might be inclined to dissolve their business despite the business maintaining profitability to transfer the business resources (e.g., techniques and human resources) of their SMEs to the next generation of capable business operators. The package upholds a goal that the public and private support organizations should unite their efforts and achieve 60,000 cases per year and 600,000 cases over a decade of SME business succession to third parties.
2. Fostering momentum for SME business succession in collaboration with private M&A platform businesses
Aiming to promote SME business succession to third parties, SMEA has been advancing measures for supporting SMEs in business matching, taking advantage of the Centers located in all prefectures across Japan. The Comprehensive Package of Measures for Supporting SMEs in Business Succession to Third Parties, which was published in 2019, upholds a policy that Japan should promote collaborative programs between the Centers and private M&A platform businesses in order to expand business matching nationwide through a simpler and smoother approach.
3. Collaboration between the Centers and M&A platform businesses
Under the policy mentioned above, SMEA will open a call for private M&A platform businesses which are willing to collaborate with the Centers, and parties which have completed preparations will begin collaboration. Specifically, SMEA will issue an ID number to access “NNDB,” a database of the Centers, to operators of M&A platform businesses which meet the predetermined requirements and will allow the businesses to view information on SMEs consulting the Centers based on prior consent with the SMEs and to post the information on their own platforms. Through this approach, SMEA will fully support SMEs in smoothly transferring their business to third parties by combining the measures for supporting nationwide business matching that take advantage of M&A platforms, and the Centers’ specific measures for supporting SMEs in achieving successful M&A.
4. Registration of M&A platforms
On July 15, 2020, SMEA will start accepting applications for registering M&A platforms. Specifically, it will support collaboration between the Centers and operators of M&A platform businesses that meet the predetermined requirements shown below. If you, an operator of an M&A platform business, wish to collaborate with the Centers, contact the office below.
Eligible businesses should:
- Have around 5,000 or more businesses registered on the platform which are willing to take ownership of SMEs’ businesses;
- Have succeeded in concluding over 100 M&A cases;
- Operate a platform on which the scope of information disclosure can be limited;
- Operate a platform on which listed SMEs are able to directly negotiate with negotiating partners;
- Have achieved collaboration between SMEs and organizations supporting business succession (public support organizations, financial institutes, etc.); and
- Be operating their businesses in accordance with the M&A Guidelines for SMEs.
Corporate Finance and Tax Affairs Division, Business Environment Department, Small and Medium Enterprise Agency (telephone: 03-3501-5803)
4. Schedule for advancing collaboration
July 15, 2020: Opening the call by SMEA for M&A platform businesses for collaboration with the Centers
Note: SMEA will not set a period for the call and will accept applicants on a periodic basis.
From August onward: Starting collaboration between platform businesses selected as collaboration partners and the Centers once preparations by both parties are complete
Division in Charge
Corporate Finance and Tax Affairs Division, Small and Medium Enterprise Agency