TOKYO - In 2024, Japanese companies engaged in a record 4,700 mergers and acquisitions (M&A), marking a new high. Kyodo News economic editor Satoshi Matsuo explains the factors behind this surge. M&A has become a key strategy for Japanese businesses facing a wave of retirements and business closures. While some acquisitions aim to expand overseas, others focus on ensuring business continuity in Japan’s rapidly aging economy.
Japan is seeing an increase in corporate acquisitions as companies struggle to survive intensifying global competition. According to research firm Recof Data, M&A deals involving Japanese companies rose by 17.1% from the previous year, reaching 4,700 transactions in 2024. Notably, listed companies accounted for about 30% of these deals, reflecting their need to expand abroad to stay competitive.
A key trend is the rise in M&A transactions driven by business succession needs, which also reached a record high. As business owners age without successors, many are turning to M&A as a solution. In 2024, succession-related M&A deals increased by 31.4% to 920 cases. This trend is particularly significant given Japan’s increasing number of “profitable closures,” where businesses remain financially healthy but shut down due to a lack of successors.
If these businesses fail to find buyers, local economies and employment could suffer. The growing number of business closures has been dubbed the “Great Business Closure Era,” highlighting the urgency of the issue.
Japan’s M&A Deals Reach Second-Highest Value in History
While the number of deals hit a record, the total value of M&A transactions in 2024 stood at 19.69 trillion yen, an 8% increase from the previous year, making it the second-highest in history after 2018.
Among the largest deals, Japan’s biggest life insurer, Nippon Life, acquired the U.S. insurer Resolution Life for 1.25 trillion yen, making it the largest M&A deal by a Japanese company in 2024. The second-largest was semiconductor manufacturer Renesas Electronics’ purchase of the U.S. software firm Altium for 889.7 billion yen, followed by Sekisui House’s acquisition of the American homebuilder MDC Holdings for 771.1 billion yen.
Foreign acquisitions have dominated Japan’s M&A landscape, with 10 of the top 15 deals in 2024 being “outbound” transactions—Japanese companies purchasing overseas firms. Despite a weak yen making foreign deals more expensive, many firms see overseas expansion as essential for growth.
7-Eleven at the Center of a Canadian Takeover Bid
One of the most notable foreign acquisition attempts involved Canada’s Alimentation Couche-Tard, which made a massive buyout proposal for Seven & i Holdings. However, rather than targeting Seven & i itself, Couche-Tard was primarily interested in acquiring 7-Eleven’s U.S. operations.
In the U.S., the convenience store market still has room for growth, particularly in urban areas. While many American convenience stores are attached to gas stations, demand is rising for standalone urban stores, an area where 7-Eleven excels. Couche-Tard sees this as an opportunity to expand its market share.
To counter the buyout threat, Seven & i’s founding family, led by Vice President Junro Ito, is reportedly considering taking the company private through a management buyout (MBO). By delisting, the company could protect itself from foreign takeover attempts and maintain control over its business strategy.
Future M&A Outlook: 2025 Could Break 5,000 Deals
Looking ahead, industry experts predict that Japan’s M&A boom will continue in 2025, with the number of deals potentially surpassing 5,000. Business succession-related M&A is expected to remain a major driver, with a growing focus on resolving disputes that can arise during these transitions.
As Japan faces an aging population and a shrinking domestic market, M&A will likely remain a key tool for companies looking to expand, restructure, or secure their survival in an increasingly competitive global economy.
Source: Kyodo
