Risks Related to Acquisition Integration and Maintaining Partnerships
First written in FY2016. 2 of 5 entries say "Materialised", first in FY2024-Q2. Latest entry: FY2025.
The whole theme swung hardest in 2024: 36 of 89 companies on the "Worse" side.
- FY2025RestatedAnnual report
「M&A activities involve both opportunities and threats and require rigorous due diligence and a systematic integration process. If risk mitigation measures are inadequate, impairment of goodwill and related costs may adversely affect business operations, performance and financial position.」
The acquisition integration risk disclosure was updated to explicitly address M&A opportunities and threats, due diligence, the integration process and the potential for goodwill impairment. - FY2024MaterialisedAnnual report
「A loss of ¥51,886 million related to the discontinuation of manufacturing and sales of the electromagnetic navigation system of Veran Medical Technologies, Inc. was recognized under “Other expenses” (¥2,337 million in inventory write-downs, ¥41,704 million in impairment losses on fixed assets, and ¥7,846 million in costs related to the voluntary recall of products and other items).」
The loss related to the discontinuation of manufacturing and sales of VMT products increased to ¥51,886 million. In addition, the share purchase agreement for Taewoong Medical was terminated on 7 March 2024, and related costs of ¥1,966 million were recognized. - FY2024-Q3WorsenedAnnual report
「A loss of ¥50,830 million related to the discontinuation of manufacturing and sales of the electromagnetic navigation system of Veran Medical Technologies, Inc. was recognized under “Other expenses” (¥2,315 million in inventory write-downs, ¥41,314 million in impairment losses on property, plant and equipment and intangible assets (Note), and ¥7,201 million in costs related to the voluntary recall of products and other items).」
The loss associated with the discontinuation of manufacturing and sales of VMT products increased to ¥50,830 million, from approximately ¥49,586 million reported for the previous quarter. The breakdown also included ¥41,314 million in impairment losses on fixed assets and other items. - FY2024-Q2MaterialisedAnnual report
「An internal investigation found that the technologies and products of VMT did not comply with the Group's quality standards. Accordingly, the Company suspended shipments of the products in February 2023 and considered further analysis and future action. After prioritizing patient safety, the Company decided on 6 September 2023 to discontinue the manufacture and sale of the products because bringing them into compliance with the Company's quality standards would require substantial costs, resuming shipments would take a long time, and customers' clinical needs were changing rapidly.」
Regarding VMT, acquired in December 2020, it was found that its technologies and products did not comply with quality standards, leading to the discontinuation of manufacturing and sales and the recognition of a loss of approximately ¥49,586 million. The risk related to acquisition integration and investment returns actually materialized. - FY2016First statedAnnual report
「The Group may conduct acquisitions and other transactions to expand its business. If it is unable to integrate acquired businesses in line with its management strategy, or unable to use management resources efficiently in its existing businesses and acquired businesses, this could affect the Group's business and its results of operations and financial position through goodwill impairment, losses on the sale of businesses, liquidation losses and other costs associated with business reorganizations and other related expenses.」
The company treats acquisition integration, the use of management resources, goodwill impairment and business reorganization costs as a series of risks.