The number of M&A transactions by Japanese companies exceeded 5,000 in 2025, while transaction value reached approximately ¥38 trillion, driving the domestic market to its highest level ever. The market's structural changes, including corporate governance reform and the restructuring of the Tokyo Stock Exchange, appear to be key factors behind this activity.
M&A by Japanese companies reached record highs in 2025, with more than 5,000 transactions and total value of approximately ¥38 trillion. Japanese-on-Japanese transactions (IN-IN) accounted for 80% of the total by number, while cross-border transactions drove up aggregate deal value.
The impact of governance reform is reflected in the 2014 Japan's Stewardship Code, the 2014 Ito Report and the 2015 Corporate Governance Code. These initiatives are described as having supported companies' appetite for M&A through measures such as improving ROE and increasing the role of independent outside directors.
In 2022, the Tokyo Stock Exchange reorganized its market segments into the Prime, Standard and Growth markets, and in 2023 strengthened its calls for companies to address PBRs below 1x. This led to greater demand for management disclosures focused on capital costs and share prices, helping build momentum toward improving corporate value, according to the analysis.
Examples of listed companies becoming more active as both buyers and sellers include Nippon Steel's acquisition of U.S. Steel and Sekisui House's acquisition of a U.S. homebuilder. The article concludes that the use of external capital for businesses through carve-outs is also accelerating.