Failure to Achieve Expected Benefits from M&A and Alliances and Unrecognized Liabilities
First written in FY2016. 2 of 5 entries say "Worsened", first in FY2020. Latest entry: FY2026.
Sms moved to the "Worse" side of this theme in 2020, 4 years before the typical company in this theme (2024).
The whole theme swung hardest in 2024: 36 of 89 companies on the "Worse" side.
44 other companies' latest entry also says "Materialised".
- FY2026MaterialisedAnnual report
「In the current consolidated fiscal year, an impairment loss of ¥22.9 billion was recognized in the overseas business in light of performance trends, the business environment and other factors.」
The risk of declining profitability and impairment associated with M&A, alliances and new businesses materialized as a ¥22.9 billion impairment loss in the overseas business. - FY2025RestatedAnnual report
「When developing new businesses internally and executing M&A transactions and business alliances with other companies, our group carefully considers whether these activities will contribute to realizing our group mission and increasing long-term corporate value before making investment decisions.」
The risks of failing to realize the benefits of M&A and alliances, unrecognized liabilities, compliance issues and impairment due to declining profitability at acquired companies, as well as responses through due diligence and business monitoring, have been reconfirmed. - FY2021WorsenedAnnual report
「In M&A transactions and business alliances with other companies, the expected benefits may not be realized and strategic objectives may not be achieved, or unrecognized liabilities and compliance issues may be discovered after execution. In addition, if the profitability of a company acquired through M&A declines significantly below the initial plan due to an economic downturn, substantial exchange rate movements or other factors, an impairment loss may need to be recognized.」
In addition to the previously identified risks of failing to realize expected benefits, unrecognized liabilities and reputational risk, compliance issues and impairment risk arising from economic conditions and exchange rates are explicitly identified. - FY2020WorsenedAnnual report
「In M&A transactions and business alliances with other companies, the expected benefits may not be realized and strategic objectives may not be achieved, or unrecognized liabilities and reputational risks may emerge after execution.」
In addition to the risks of failing to realize the benefits of M&A and alliances and of unrecognized liabilities, the emergence of reputational risks after execution is explicitly identified. - FY2016First statedAnnual report
「However, if these M&A transactions and alliances fail to produce the expected benefits and their strategic objectives cannot be achieved, or if unrecognized liabilities are discovered after the investment, this could affect the operating results and financial condition of our group.」
While conducting due diligence and making decisions at Board of Directors meetings, the failure to realize the benefits of acquisitions and alliances is identified as a risk.