Since the collapse of the economy in 1991, Japanese corporates have virtually been unmentionable in the business world. As the economy is showing signs of recovery, it has accelerated its efforts to open further to the world economy and be freed from the horrendous clutches of recession and economic slowdown. On the corporate front, takeovers and buyouts have suddenly become rampant. According to Dealogic, a global M&A consultant, Japanese companies announced 162 acquisitions of non-Japanese entities worth $20.8 bn between January and mid-August 2006. This is more than the $15.9 bn worth overseas acquisitions announced in 2005 and five times the total in 2003. Mergers & Acquisitions (M&As) have been on the rise, reaching a then record-high of approximately 2,725 closed deals in 2005. In terms of the 2005 breakdown, the composition of M&A closed deals regarding domestic M&A, inbound and outbound types were around 75%, 15% and 8% of the total, respectively. Over the past decade, not only domestic deals but also M&As, involving foreign companies acquiring Japanese companies, have been increasing dramatically. The same scenario continued in the first half of 2006 and reported to have hit another record-high of 1,409 closed deals.
The
cut-throat global competition and the increasing need for heavy investments in
R&D have led to a large number of M&As, particularly in the financial
services sector, pharmaceuticals, consumer electronics and telecommunications.
Further, the relaxations in many non-tradable sectors helped M&As to emerge
as a more realistic market-entry option for foreign investors. |
