Tokyo, Japan — Japan is poised to see a record number of takeover bids from foreign companies in 2025 as government reforms, a sharp decline in the yen, and shifting corporate governance norms combine to reshape the country’s mergers and acquisitions landscape.
According to data compiled by Bloomberg, foreign companies made 157 proposals to acquire majority stakes in Japanese firms as of the end of August — putting the country on pace to surpass the 2024 record of 193. The surge reflects both structural and strategic changes that are making Japanese corporations more vulnerable — and attractive — to foreign buyers.
A key driver behind this shift is a set of government guidelines introduced two years ago, urging Japanese firms to give “sincere consideration” to takeover bids rather than rejecting them outright. “In the past, if management said no, that was often the end of it,” said Dr. Shigeru Matsumoto, professor at Kyoto University’s Graduate School of Management. “Now, it’s no longer easy to just turn bidders away at the gate.”
A weaker yen — currently trading about 11 percent below its five-year average — has further fueled the wave of foreign interest, lowering acquisition costs and making Japanese assets more appealing to overseas investors. High-profile deals underscore the scale of interest: Bain Capital’s 510 billion yen (US$3.4 billion) purchase of Mitsubishi Tanabe Pharma and Blackstone’s 490 billion yen bid for IT services firm TechnoPro Holdings are among the largest so far this year.
While not all bids are successful — Canada’s Alimentation Couche-Tard abandoned its US$46 billion offer for Seven & i Holdings after nearly a year — the strategic calculus for both foreign investors and Japanese companies has shifted. Domestic firms, under increasing shareholder pressure, are also dismantling traditional takeover defenses. As of June 2024, the number of companies employing such measures had fallen to 251, less than half the 2008 peak. Among large-cap firms, fewer than 2 percent still retain “poison pill” protections.
The move mirrors trends in the U.S. market, where roughly 60 percent of S&P 500 companies had poison pills two decades ago, compared with just six by 2022, according to law firm Nagashima Ohno & Tsunematsu. Japan’s Foreign Exchange and Foreign Trade Act, which allows the government to block foreign acquisitions on national security grounds, has been invoked only once — in 2008, to prevent a British fund from increasing its stake in J-Power.
Even acquisitions involving sensitive sectors are advancing. Taiwanese component manufacturer Yageo recently passed regulatory review to acquire Shibaura Electronics, a key temperature sensor producer designated a “core industry” under national security rules. Yageo’s successful bid even outmaneuvered a counter-offer from Minebea Mitsumi, which positioned itself as a domestic “white knight.”
For foreign investors, the combination of a cheap yen, thousands of listed companies, and weakened defenses creates a rare opportunity. “There are still a lot of bargains to be found,” said Dr. Ulrike Schaede, professor at the University of California, San Diego. “But more importantly, 20 years of corporate governance reforms have left Japanese companies without any defenses — they are naked, and have no guns.”
With Japan’s evolving regulatory landscape and shifting boardroom attitudes, analysts expect 2025 to mark a pivotal year — one that could redefine Japan’s relationship with global capital and reshape the ownership structure of some of its most storied companies.
