The number of Japanese companies' mergers and acquisitions of overseas firms continues to rise as companies seek to explore more business opportunities abroad at a time when the rapidly aging and shrinking population clouds the prospects of the domestic market. That trend has been accompanied by a recent string of high-profile failures and massive losses involving overseas companies acquired by Japanese firms. Companies that have an appetite for overseas M&As need to learn from the cases of acquisitions that went wrong.
According to M&A consultancy Refco Corp., last year saw a record 636 cases involving Japanese companies buying overseas firms, with their combined value topping ¥10 trillion for the second year in a row. That included SoftBank Group's $31 billion acquisition of British semiconductor designer ARM Holdings PLC, the largest foreign acquisition by a Japanese firm. The trend is believed to be continuing this year, with companies across different sectors and of varying size showing interest in buying overseas firms to explore new markets abroad.
We have also witnessed a series of overseas acquisitions by major Japanese companies go wrong.