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Japan Inc's overseas M&As soar to a record $106bn in first half

Ultra-low interest rates helped push the figure up three-fold from a year ago

Takeda Pharmaceutical President and CEO Christophe Weber speaks at a news conference in Tokyo on May 9, 2018.   © Reuters

TOKYO -- The value of overseas mergers and acquisitions by Japanese companies from January to June this year reached 11.74 trillion yen ($106 billion), a record for the period, buoyed by the ease of raising huge funds at ultra-low interest rates.

The figure represents a more than three-fold jump from the same period a year earlier, according to M&A research firm Recof Data. The number of deals increased by about 10% to 340, also a record, Recof Data said.

Across a wide range of industries, Japanese companies are seeking growth opportunities outside their home market.

The biggest contributor the total was Takeda Pharmaceutical’s planned purchase of Irish drugmaker Shire for about 7 trillion yen. Even without the deal, the value of acquisitions by Japanese companies grew to the second-highest behind the figure for the same period in 2015.

Other major contributors were SoftBank Group’s investment in U.S.-based Uber Technologies, the biggest provider of ride-hailing services, and Sony’s acquisition of a stake in the operator of EMI Music Publishing, both of which were worth hundreds of billions of yen.

 

In recent years, there has been an active move to strengthen the services sector, said a senior official with Merrill Lynch Japan Securities.

Toyota Motor has decided to invest in Grab, a ride-hailing operator in Southeast Asia, while Recruit Holdings has agreed to buy U.S. job search website Glassdoor.

The number of M&A deals for information technology companies utilizing artificial intelligence and big data is also on the rise.

In the past, Japanese companies had a strong tendency to be self-sufficient, developing products using only their own resources and technologies.

“M&As have now become a common option in the companies’ management strategies,” said Yoshihiko Yano of Goldman Sachs.

The number of M&A deals involving Japanese companies came to a record 1,798 between January and June, up 33% from the same period a year earlier.

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