Guidelines issued by the industry ministry in 2023 have opened the door for companies to launch takeover bids without the consent of the companies being acquired, which was widely considered taboo in the country.

The guidelines for action on corporate takeovers require companies to consider any "serious" takeover proposals that could improve their corporate value. The term "nonconsensual takeovers" is used, rather than "hostile takeovers," in an apparent bid to reduce the sense of a taboo.

In Japan, it used to be common for takeover bids to be launched after both sides reached an agreement in behind-the-scenes negotiations. The number of nonconsensual takeover bids has started to rise, however.

In 2023, Dai-ichi Life Holdings offered to buy employee welfare service firm Benefit One without its consent and during a similar offer by another company, and successfully acquired Benefit One.

In December 2024, motor manufacturer Nidec announced its takeover bid for machine manufacturer Makino Milling Machine without first making a proposal to Makino Milling.

Explaining the move, a Nidec official said that it would have taken a long time to reach an eventual agreement, if this was possible. Meanwhile, Makino Milling has asked Nidec to postpone the takeover bid, citing the need to take time to consider it.

Corporate management is wary about the possibility of being acquired through a nonconsensual takeover bid. "It's really like a bolt from the blue," said an official from the management team of a company that received such a takeover bid. "If this is allowed, there are no merits of being a listed company."

According to Yo Ota, a lawyer at major Japanese law firm Nishimura & Asahi, who helped compile the 2023 guidelines, nonconsensual takeover bids are expected to increase, in part reflecting calls from activist shareholders to improve capital efficiency.

"The best way to defend companies is to raise their stock prices," Ota said. "Corporate management needs to update their attitudes toward capital markets and 'visualize' management."

The number of merger and acquisition cases involving Japanese companies reached 4,700 last year, the highest figure since data began in 1985, according to Tokyo-based research firm Recofdata.

"It would not be surprising if (the number of such cases) exceeds 5,000 this year, barring a sudden economic downturn," said Hideyuki Sawada of Recof, a group firm of Recofdata.