Risk of Failure to Achieve Post-M&A Business Plans and Recover Investments
First written in FY2018. 2 of 5 entries say "Worsened", first in FY2023-Q2. Latest entry: FY2024.
GAtechnologies moved to the "Worse" side of this theme in 2023, 1 year before the typical company in this theme (2024).
The whole theme swung hardest in 2024: 36 of 89 companies on the "Worse" side.
25 other companies' latest entry also says "Worsened".
- FY2024WorsenedAnnual report
「In particular, under the IFRS adopted by the Company, goodwill is not amortized, and the impact of impairment tends to be greater than under Japanese GAAP.」
Clarifies that, regarding post-M&A investment recovery and impairment risks, the non-amortization of goodwill under IFRS may increase the impact when impairment occurs. - FY2023-Q2WorsenedAnnual report
「As the Group will continue to actively pursue new businesses, it recognizes that there is a reasonable possibility that these risks will materialize. The Group seeks to mitigate the risks by following the processes of the Investment Committee and Management Meeting and conducting a feasibility assessment for new businesses in advance. After making an investment, it conducts regular monitoring and works to mitigate the risks by deciding whether to scale down or withdraw from a business.」
In relation to post-M&A business development and investment recovery risks, expands the scope of the risks by specifying, for new businesses generally, the time required to generate stable earnings and the possibility of scaling down or withdrawing if performance deviates from plans. - FY2020MitigatedAnnual report
「The Group believes it can mitigate these risks by thoroughly examining market trends, customer needs, the target company's performance and financial condition, its technological advantages and market competitiveness, and the Group's business portfolio in accordance with its investment management regulations, and by holding investment committee meetings to select investment targets, determine investigation policies, and conduct investigations and reviews for investment decisions.」
Describes the framework for selecting, investigating, reviewing and verifying investments after execution through investment management regulations and the investment committee to address the risks of failing to meet post-M&A objectives and recover investments. - FY2019RestatedAnnual report
「When conducting M&A, the Group endeavors to proceed after giving sufficient consideration to market trends, customer needs, the target company's performance and financial condition, its technological advantages and market competitiveness, and the Group's business portfolio.」
Reiterates the policy of continuing M&A and the risks relating to due diligence, post-acquisition business development and investment recovery. - FY2018First statedAnnual report
「If an acquired business fails to develop as planned, the invested funds cannot be recovered, or additional costs arise, this may significantly affect the Company's performance, growth outlook and business operations.」
While using M&A as a means of growth, describes the risks of failing to meet post-acquisition plans, being unable to recover investments and incurring additional costs.