LSEG data indicate that the value of deals involving Japanese companies increased threefold in the first half, and the value of M&A in Asia reached $650 billion, more than double that of last year.
Japan is dominating Asia in mergers and acquisitions(M&A), with $232 billion in deals.
Japan is leading Asia’s M&A market, hitting deals worth $232 billion in the first half of 2025. Bankers expect the trend to fuel the multi-billion-dollar take-private agreement, outbound investments, and private equity funds.
Bankers claim that the desire for more mergers is very popular due to Japan’s low interest rates, which support acquisitions and management reforms aimed at tackling chronic low valuations among company values, attracting attention from foreign and activist investors.
London Stock Exchange Group (LSEG) data indicate that the value of deals involving Japanese companies increased threefold in the first half, and the value of mergers and acquisitions (M&A) in Asia reached $650 billion, more than double the value of last year.
Bankers state that the Japanese government is also encouraging better corporate practices, including turning listed subsidiaries into private companies. As they seek new growth opportunities, Japanese companies are also attempting to acquire foreign businesses. These efforts will ignite mega deals.
Japan is comparatively shielded from global issues despite the world coping with geopolitical and economic uncertainty. Bankers state that this situation has helped to keep deals moving forward.
Some significant examples include Toyota Motor Group companies and telecom giant Nippon Telegraph and Telephone, which listed its listed subsidiary as private in deals worth $34.6 billion and $16.5 billion, some of the biggest deals in the world.
Kei Nitta, global head of M&A at Nomura Securities, claims that many more similar deals are upcoming, and their numbers are growing.
SoftBank Group also led a new fundraising round worth up to $40 billion into OpenAI, the maker of ChatGPT. It was the largest private tech fundraising in history.
Despite Japan’s domestic market shrinking, the long-standing tendency of Japanese businesses to search for overseas expansion is strong.
Japanese financial institutions, including Dai-ichi Life and Nomura Holdings, have also announced major deals. Bankers say there is still strong interest across different industries.
Nitta added that debates over political issues, including tariffs and foreign conflicts, have made some investors cautious and delayed a few decisions, but the appetite for investment remains very strong.
Japanese companies themselves have become attractive acquisition targets for buyers. Many global companies have been reconsidering their supply chains and resources over the past two years.
However, some challenges could slow down deal-making in Japan.
Atsushi Tatsuguchi, head of the M&A advisory group at Mitsubishi UFJ Morgan Stanley Securities, stated that uncertainty surrounding the global economic outlook makes it harder to assess companies’ prospects, causing a disconnect between buyers and sellers on valuation and failed deals.
As part of Japan’s push for business reform, companies are under pressure to sell off non-core business units. Private equity funds are often the ones buying these hived-off parts.
For example, Seven & I Holdings, a convenience store company targeted for a buyout by Canadian company Alimentation Couche-Tard, sold off its superstores and other peripheral businesses to Bain Capital for around $5.5 billion in March.
Yusuke Ishimaru, senior deputy head of M&A advisory at SMBC Nikko Securities, stated that selling off non-core assets will continue to be a trend in the near term.
Bankers also say there is a strong list of future deals involving private equity firms.
One potential deal in the second half of the year is the sale of Japanese cybersecurity company Trend Micro, valued at 1.32 trillion yen ($8.54 billion), with bidders Bain Capital and EQT.
Ishimaru also said that private equity funds are likely to continue buying and taking public companies private.