Risk of Business Alliances and Acquisitions Failing to Deliver Results and Being Terminated
First written in FY2016. 2 of 4 entries say "Materialised", first in FY2021. Latest entry: FY2023.
Otsuka Holdings moved to the "Worse" side of this theme in 2022, the same year as the typical company in this theme.
The whole theme swung hardest in 2018: 13 of 78 companies on the "Worse" side.
28 other companies' latest entry also says "Materialised".
- FY2023MaterialisedAnnual report
「With respect to various business alliances and acquisitions, the Group may terminate an alliance or recognize a loss if it fails to achieve the group synergies planned at the time of the alliance or acquisition.」
Impairment losses were recognized on alliance products including AVP-786, Deya Foods and Sumitomo Pharma Co.,Ltd., indicating that the risk of failing to achieve results after alliances and acquisitions has materialized. - FY2021MaterialisedAnnual report
「The company has recognized a provision for an unfavorable contract related to a co-promotion agreement for certain therapeutic drugs.」
Risks related to business alliances and co-promotion agreements were actually recognized as a ¥9,380 million provision for contract losses. - FY2017RestatedAnnual report
「In connection with these alliances and other arrangements, the Group makes every effort to mitigate the associated risks by fully assessing their business effects and the business execution capabilities and creditworthiness of its partners or target companies. For capital alliances and acquisitions, it also conducts detailed due diligence on the target company's financial condition, contractual relationships and other matters.」
The company continues to identify the risks of failing to achieve the results of alliances and acquisitions, termination and constraints arising from non-compete obligations, together with a policy of mitigating these risks through due diligence. - FY2016First statedAnnual report
「Due to changes in the business environment after an alliance or other arrangement is implemented, the Group may fail to obtain the results initially planned from the alliance or other arrangement, or the alliance or other arrangement may be terminated for some reason. This could have a material impact on the Group's operating results and financial condition.」
The company explicitly identifies failure to achieve planned results, termination and strategic constraints arising from non-compete obligations as risks related to technology alliances, business alliances, joint ventures, capital alliances and acquisitions.