Japan attracts attention as the number of M&A transactions involving Japanese companies reached a record high in January–September this year, even as the country strengthens reviews of foreign-capital acquisitions of domestic companies. Overseas private-equity funds are deploying capital against a backdrop of yen depreciation, while Japanese companies are restructuring their businesses and owners are acting ahead of tax increases..

M&A involving Japanese companies totalled 3,883 transactions in January–September this year, the highest figure for the period since 1985. Acquisitions of Japanese companies by foreign investors totalled 326 transactions, a significant increase from the same period a year earlier, and the acquisition value reached approximately ¥6.2 trillion. The total value of M&A was ¥22 trillion. Although this represented a declining trend compared with the same period last year, the concentration of large transactions is considered to be one contributing factor.

Overseas private-equity funds drove the major transactions. Apollo Global Management acquired 日本板硝子 for approximately ¥590 billion, while KKR has indicated plans to acquire ダイヨホールディングス for approximately ¥500 billion. Competition involving European funds and US-based Bain Capital has also intensified over the strategy to acquire カカクドットコム. The yen's depreciation has been cited as a factor encouraging overseas capital to acquire Japanese companies.

As part of the restructuring of domestic companies, Renesas Electronics is expected to sell its timing components business to SiTime, with an estimated gain on disposal of approximately ¥443.3 billion expected to be reflected in results for the first 2 quarters of the current fiscal year. From next year onward, the government plans to begin full application of the amended Foreign Exchange and Foreign Trade Act and expand the scope of reviews of foreign capital, including the possibility of easing economic security regulations. In addition, the minimum tax is scheduled to be strengthened from next year, with special deductions expected to be reduced and the applicable tax rate to rise, potentially affecting the asset-sale decisions of founders and owners.