Post-acquisition integration benefits and contingent liability risk
First written in FY2016. 13 of 36 entries say "Worsened", first in FY2017-Q3. Latest entry: FY2026.
The whole theme swung hardest in 2025: 10 of 33 companies on the "Worse" side.
6 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「The decrease in contingent liabilities during the current consolidated fiscal year was due to a decrease in the amount of indemnification obligations borne by the Company following developments in some disputes.」
Indemnification under the share transfer agreement after the sale of Permasteelisa decreased from ¥4,338 million to ¥399 million, substantially reducing contingent liabilities. - 2026-05-25MitigatedGeneral Meetings of Shareholders
「なお、一部の係争事件で当連結会計年度に進展があったことに伴い、当連結会計年度において、当社が義務を負う補償の額が減少しています。」
ペルマスティリーザ社の株式譲渡契約に基づく補償について、偶発債務を399百万円と記載し、補償額の減少を示している。 - FY2026-H1MitigatedAnnual report
「The decrease in contingent liabilities during the current interim consolidated accounting period was due to a decrease in the amount of indemnification obligations borne by the Company following developments in some disputes during the period.」
Indemnification under the share transfer agreement after the sale of Permasteelisa decreased from ¥4,338 million at the end of the previous fiscal year to ¥380 million. - FY2025MitigatedAnnual report
「Indemnification under the share transfer agreement (Note) 4,807 4,267」
Indemnification after the sale of Permasteelisa decreased from ¥4,807 million at the end of the previous fiscal year to ¥4,267 million. - FY2025-H1MitigatedAnnual report
「Indemnification under the share transfer agreement (Note) 4,807 4,267」
Indemnification after the sale of Permasteelisa decreased from ¥4,807 million at the end of the previous fiscal year to ¥4,267 million. - FY2024WorsenedAnnual report
「Indemnification under the share transfer agreement (Note) 4,388 4,807」
Indemnification under the share transfer agreement after the sale of Permasteelisa increased from ¥4,388 million at the end of the previous fiscal year to ¥4,807 million. - FY2024-Q3Increase from the fiscal year-end, decrease from the previous quarterAnnual report
「Indemnification under the share transfer agreement (disputes) (Note) 4,388 4,645」
Indemnification for disputes after the sale of Permasteelisa increased from ¥4,388 million at the end of the previous fiscal year to ¥4,645 million, while decreasing from ¥4,734 million reported in the previous quarterly report. - FY2024-Q2WorsenedAnnual report
「Indemnification under the share transfer agreement (disputes) (Note) 4,388 4,734」
Indemnification for disputes after the sale of Permasteelisa increased from ¥4,388 million at the end of the previous consolidated fiscal year to ¥4,734 million. - FY2024-Q1WorsenedAnnual report
「Indemnification under the share transfer agreement (disputes) (Note) 4,388 4,745」
Indemnification for disputes after the sale of Permasteelisa increased from ¥4,388 million at the end of the previous consolidated fiscal year to ¥4,745 million. - FY2023MaterialisedAnnual report
「The amount of the indemnification obligation that had been treated as a contingent liability in the previous consolidated fiscal year was recognized as a liability in the consolidated statement of financial position for the current consolidated fiscal year because the obligation was expected to be fulfilled during the current consolidated fiscal year.」
The indemnification obligation relating to implementation of Permasteelisa's rehabilitation plan moved from contingent liabilities to recognized liabilities and was realized as a loss from discontinued operations. Indemnification for disputes amounted to ¥4,388 million. - FY2023-Q3Indemnification for disputes decreased quarter on quarter; rehabilitation plan indemnification eliminatedAnnual report
「Indemnification under the share transfer agreement (disputes) (Note 1) 4,147 4,275 Indemnification under the share transfer agreement (implementation of the rehabilitation plan) (Note 2) 1,367 －」
Regarding contingent liabilities after the sale of Permasteelisa, indemnification for disputes decreased from ¥4,317 million in the previous quarter to ¥4,275 million, while indemnification for implementation of the rehabilitation plan remained at zero. - FY2023-Q2MitigatedAnnual report
「Indemnification under the share transfer agreement (disputes) (Note 1) 4,147 4,317 Indemnification under the share transfer agreement (implementation of the rehabilitation plan) (Note 2) 1,367 －」
Indemnification for disputes after the sale of Permasteelisa increased from the end of the previous fiscal year, while indemnification for implementation of the rehabilitation plan fell to zero. The composition of indemnification risks has changed. - FY2023-Q1Increased indemnification for disputes, elimination of rehabilitation plan indemnificationAnnual report
「Indemnification under the share transfer agreement (disputes) (Note 1) 4,147 4,328 Indemnification under the share transfer agreement (implementation of the rehabilitation plan) (Note 2) 1,367 －」
Regarding contingent liabilities after the sale of Permasteelisa, indemnification for disputes increased from ¥4,147 million at the end of the previous fiscal year to ¥4,328 million, while indemnification for implementation of the rehabilitation plan fell from ¥1,367 million to zero. - FY2022WorsenedAnnual report
「Indemnification under the share transfer agreement (disputes) (Note 1) 4,035 4,147 Indemnification under the share transfer agreement (implementation of the rehabilitation plan) (Note 2) 1,298 1,367」
Indemnification after the sale of Permasteelisa amounted to ¥4,147 million for disputes and ¥1,367 million for implementation of the rehabilitation plan, both increases from the end of the previous fiscal year. - FY2022-Q3WorsenedAnnual report
「Indemnification under the share transfer agreement (disputes) (Note 1) 4,035 3,959 Indemnification under the share transfer agreement (implementation of the rehabilitation plan) (Note 2) 1,298 1,305」
Indemnification after the sale of Permasteelisa increased for both disputes and implementation of the rehabilitation plan, from ¥3,939 million and ¥1,299 million, respectively, reported in the previous quarterly report. - FY2022-Q2MitigatedAnnual report
「Indemnification under the share transfer agreement (disputes) (Note 1) 4,035 3,939 Indemnification under the share transfer agreement (implementation of the rehabilitation plan) (Note 2) 1,298 1,299」
Indemnification for disputes after the sale of Permasteelisa decreased from ¥4,035 million to ¥3,939 million, while indemnification for implementation of the rehabilitation plan increased from ¥1,298 million to ¥1,299 million. - FY2022-Q1WorsenedAnnual report
「Indemnification under the share transfer agreement (disputes) 4,035 4,090 Indemnification under the share transfer agreement (implementation of the rehabilitation plan) 1,298 1,316」
Indemnification after the sale of Permasteelisa increased from ¥4,035 million to ¥4,090 million for disputes and from ¥1,298 million to ¥1,316 million for implementation of the rehabilitation plan. - FY2021RestatedAnnual report
「As measures to address integration, we are strengthening the framework for efficiently establishing and operating post-integration review and monitoring processes by formulating global policies common to all integrations.」
The Company continues to disclose the risks of failing to achieve synergies and contingent liabilities after acquisitions and investments, and has reconfirmed management through global common policies, PMI, the Investment Review Committee and the M&A Committee. - FY2021-Q2ReframedAnnual report
「There are no applicable items because the shares of Permasteelisa were transferred.」
Upon completion of the share transfer of Permasteelisa, the previous performance guarantees and amounts claimed in litigation relating to ordered construction projects were no longer applicable. At the same time, new indemnification obligations were disclosed, up to ¥4,098 million for disputes after the share transfer and up to ¥8,001 million for implementation of the rehabilitation plan, changing the risk structure to post-sale indemnities. - FY2021-Q1RestatedAnnual report
「The Company decided at a meeting of the Board of Directors held on 1 May 2020 to transfer 100% of Permasteelisa's issued shares and entered into a share transfer agreement.」
While the existing performance guarantees and other obligations will cease after the sale of Permasteelisa, the Company has reconfirmed the structure under which new contingent liabilities, including indemnities for disputes and rehabilitation plan costs, will arise. - FY2020WorsenedAnnual report
「If Permasteelisa incurs losses after the share transfer date, the Group is obligated to indemnify those losses. The maximum amount of the indemnity is approximately €33 million, or approximately ¥4,000 million.」
Following the decision to sell Permasteelisa, new contractual obligations arose in addition to the existing performance guarantee and litigation risks, including indemnities of up to approximately ¥4 billion for disputes and approximately ¥8.1 billion for rehabilitation plan costs. - FY2020-Q3MitigatedAnnual report
「Guarantees for performance guarantees (Note 1) 142,120 104,893 Amounts claimed in litigation and other proceedings relating to ordered construction projects (Note 2) 19,145 7,643」
The balance of performance guarantees relating to Permasteelisa and amounts claimed in litigation and other proceedings decreased from the end of the previous fiscal year, and it was stated that an agreement had been reached toward settlement in some of the litigation. - FY2020-Q1MitigatedAnnual report
「Guarantees for performance guarantees (Note 1) 142,120 126,237 Amounts claimed in litigation and other proceedings relating to ordered construction projects (Note 2) 19,145 18,812」
The balance of performance guarantees relating to Permasteelisa decreased from ¥142,120 million to ¥126,237 million, while amounts claimed in litigation and other proceedings decreased from ¥19,145 million to ¥18,812 million. - FY2019WorsenedAnnual report
「As part of preparing a rehabilitation plan to restore Permasteelisa's profitability, a rigorous review was conducted of all ordered projects. As a result, mainly due to provisions for construction costs primarily in North America and a substantial increase in the allowance for doubtful accounts, revenue decreased 5.7% year on year to ¥256,050 million, while the business recorded a loss of ¥38,119 million, compared with business income of ¥4,553 million in the same period of the previous year.」
Post-acquisition integration and contingent liability risks materialized substantially as provisions for construction costs, an allowance for doubtful accounts and a business loss at Permasteelisa. The balance of performance guarantees was ¥142,120 million. - FY2019-Q3MaterialisedAnnual report
「We determined that it was reasonable to terminate this share transfer agreement. Based on the agreement of both the seller and buyer, the Board of Directors decided on 27 November 2018 to terminate the agreement, and the agreement was terminated on the same date.」
Approval from the Committee on Foreign Investment in the United States could not be obtained for the sale of Permasteelisa, and the share transfer agreement was actually terminated. Together with the risks relating to performance guarantees and other obligations remaining after the sale, the risks associated with post-acquisition integration and the sale became concrete. - FY2019-Q2MitigatedAnnual report
「Guarantees for performance guarantees (Note 1) 165,480 157,133」
The balance of guarantees for performance guarantees relating to Permasteelisa and its subsidiaries decreased from ¥165,480 million at the end of the previous fiscal year to ¥157,133 million. - FY2019-Q2MaterialisedAnnual report
「With respect to this share transfer, we received notice from the Committee on Foreign Investment in the United States that approval could not be granted under the measures currently proposed by us and Grandland.」
Approval for the sale of Permasteelisa could not be obtained, and the event in which the sale became impossible in practice actually occurred. - FY2019-Q1MitigatedAnnual report
「Guarantees for performance guarantees 165,480 162,525」
The balance of guarantees for performance guarantees relating to Permasteelisa and its subsidiaries decreased from ¥165,480 million at the end of the previous fiscal year to ¥162,525 million. The decrease is explained as being mainly due to the impact of foreign exchange translation. - FY2018WorsenedAnnual report
「Guarantees of ¥165,480 million for performance guarantees. The guarantees cover mainly performance obligations relating to construction projects ordered from Permasteelisa S.p.A. and its subsidiaries. If the company or its subsidiaries are unable to fulfill their performance obligations under business contracts, the Group will be required to assume the related liabilities.」
The balance of guarantees for performance guarantees increased from ¥150,777 million at the end of the previous fiscal year to ¥165,480 million. The maximum contingent liabilities after the sale of Permasteelisa are estimated at approximately €220 million, or approximately ¥29 billion. - FY2018-Q3RestatedAnnual report
「Guarantees for performance guarantees (Note 1) 150,777 173,979」
The balance of guarantees for performance guarantees relating to Permasteelisa and its subsidiaries was disclosed as ¥173,979 million, up from ¥150,777 million at the end of the previous fiscal year. - FY2018-Q2WorsenedAnnual report
「In addition to the loans described above, depending on the outcome of certain disputes involving Permasteelisa after the share transfer date and on the collection and profitability of payments for certain construction projects, the Group may bear losses as contingent liabilities. As of the end of the second quarter of the current consolidated fiscal year, the maximum amount of these contingent liabilities is estimated at approximately €230 million, or approximately ¥30,000 million.」
Contingent liabilities relating to disputes, collection of construction payments and profitability remained after the sale of Permasteelisa and were quantified at a maximum of approximately ¥30 billion. The balance of performance guarantees also increased to ¥185,204 million. - FY2018-Q1WorsenedAnnual report
「Guarantees of ¥158,346 million for performance guarantees.」
The balance of performance guarantees relating to Permasteelisa S.p.A. and its subsidiaries increased from ¥150,777 million at the end of the previous consolidated fiscal year to ¥158,346 million. - FY2017WorsenedAnnual report
「Guarantees of ¥150,777 million for performance guarantees. The guarantees cover mainly performance obligations relating to construction projects ordered from Permasteelisa S.p.A. and its subsidiaries. If the company or its subsidiaries are unable to fulfill their performance obligations under business contracts, the Group will be required to assume the related liabilities.」
The balance of performance guarantees relating to Permasteelisa and other entities increased from ¥132,718 million at the end of the previous consolidated fiscal year to ¥150,777 million. - FY2017-Q3WorsenedAnnual report
「Guarantees of ¥146,011 million for performance guarantees. The guarantees cover mainly performance obligations relating to construction projects ordered from Permasteelisa S.p.A. and its subsidiaries. If the company or its subsidiaries are unable to fulfill their performance obligations under business contracts, the Group will be required to assume the related liabilities.」
The balance of performance guarantees relating to Permasteelisa and its subsidiaries increased from ¥132,718 million at the end of the previous consolidated fiscal year and ¥109,291 million in the previous quarter to ¥146,011 million. - FY2017-Q2RestatedAnnual report
「Guarantees of ¥109,291 million for performance guarantees. The guarantees cover mainly performance obligations relating to construction projects ordered from Permasteelisa S.p.A. and its subsidiaries. If the company or its subsidiaries are unable to fulfill their performance obligations under business contracts, the Group will be required to assume the related liabilities.」
The balance of performance guarantees relating to Permasteelisa and its subsidiaries has been disclosed quantitatively. The decrease from ¥132,718 million in the previous consolidated fiscal year is explained as being mainly due to the impact of foreign exchange translation. - FY2016First statedAnnual report
「The Group will seek to integrate the target business with its corporate culture and management strategy in order to maximize integration benefits, but there is no guarantee that the expected profits or synergies will be achieved.」
M&A is being used as a means of expanding overseas, while integration failures and unrecognized liabilities have been disclosed as risks.