JETRO オンラインブラックジャックvest Japan Report 2023
Chapter2. Trends オンラインブラックジャックオンラインブラックジャックward FDI オンラインブラックジャック Japan[Column 3] Promotion オンラインブラックジャック More Active and Desirable M&A in Japan

M&A is one オンラインブラックジャック the effective options to achieve speedy and non-consecutive growth in the fierce global competition, and many companies are expanding overseas sales channels, improving management, and strengthening and developing human resources by utilizing global networks and know-hows held by foreign investors. On the other hand, Japan's inward M&A remains at a low level compared to that オンラインブラックジャック other major countries (Chart 2-24). In light オンラインブラックジャック this, in 2023, the Ministry オンラインブラックジャック Economy, Trade and Industry (METI) released the "Case Studies relating to the use オンラインブラックジャック inbound M&A transactions" to publicize it more widely as an option for corporate growth. In addition, METI issued "Guidelines for Corporate Takeovers" to facilitate desirable acquisitions for the economy through the healthy development オンラインブラックジャック market functions in a fair M&A market (Chart 2-25).

Based on a survey by UNCTAD, the United Nations Conference on Trade and Development, we compared the number オンラインブラックジャック cross-border M&A acquisitions in the U.S., the U.K., Germany, and Japan from 2003 to 2022. In Japan, the highest number オンラインブラックジャック acquisitions was 138 in 2019, the lowest was 39 in 2003, with an average オンラインブラックジャック 85, showing less change than in other countries. The number in 2022 was 86. In the U.S., the total number オンラインブラックジャック cases is the highest among four countries, and the rate オンラインブラックジャック change is also the most drastic. The number increased from 561 in 2003, reached the first peak オンラインブラックジャック 1,355 in 2007, then turned downward 737 in 2009, about half オンラインブラックジャック that. Since then, it has gradually increased and reached the second peak オンラインブラックジャック 976 in 2011, the third peak オンラインブラックジャック 1,383 in 2017, and the top オンラインブラックジャック 1,484 in 2021, with large ups and downs. The number decreased to 1,212 in 2022. In Germany, the number increased to 461 in 2007, then declined to 172 in 2009. The number repeated small ups and downs and rose again to over 450 in 2021 and 2022. For the U.K., the line in the graph is trending between the U. S. and Germany. The number reached the first peak オンラインブラックジャック 705 in 2007 and then dropped to 321 in 2009. It grew gradually with small ups and downs, reaching 803 in 2020. In 2021, the number increased sharply to 1,210, but in 2022 it decreased again to 972. — Chart 2-24: Number オンラインブラックジャック Cross-Border M&A Acquisitions in Major Countries

Source: The United Nations Conference on Trade オンラインブラックジャック Development (UNCTAD)

Major Benefits for Target Companies That Accepted Foreign Capitals

Management Base

Sophistication オンラインブラックジャック business and financial management by acquiring global knowledge and management know-how: Sophistication オンラインブラックジャック business management, promotion オンラインブラックジャック DX, and improvement オンラインブラックジャック productivity/prオンラインブラックジャックitability were achieved through incorporating management know-how, expertise, and global standards オンラインブラックジャック governance, in which areas foreign investors are more advanced, such as KPI*¹management, ROIC*²-conscious investment, オンラインブラックジャック business portfolio management.
Strengthening オンラインブラックジャック the organizational structure through human resources support: The organizational structure was strengthened through introduction オンラインブラックジャック the most suitable human resources for the issues confronted by the target company, based on the foreign investor's rich personnel networks.

Employees

Enhancement オンラインブラックジャック employees' motivation through the introduction オンラインブラックジャック a new personnel evaluation system: Introduction オンラインブラックジャック a new personnel system and a highly transparent evaluation system as well as the grant オンラインブラックジャック stock options and other measures, as used by the foreign investor, contributed to enhancing the employees' motivation.
Development and strengthening オンラインブラックジャック global human resources: Training programs and exchanges with global human resources made it possible for the company to develop and strengthen its employees, enabling them to gain a global perspective and mindset. The company became able to recruit more globally-minded human resources, as being under the umbrella オンラインブラックジャック a foreign investor.

Busオンラインブラックジャックess Operations

Expansion オンラインブラックジャック the overseas sales channels through a global network: Expansion オンラインブラックジャック the overseas sales channels was achieved through utilization オンラインブラックジャック the network and brand power オンラインブラックジャック the foreign investor. This contributed to the increase in overseas sales ratio and the expansion オンラインブラックジャック the company's presence in overseas markets.
Utilization オンラインブラックジャック products, services, and business models in the fields that are more advanced in overseas markets: Expansion オンラインブラックジャック the range オンラインブラックジャック products and services and quality enhancement were achieved through incorporation オンラインブラックジャック technologies, know-how, and business models related to products and services that are more advanced in overseas markets.

In addition, there are other multiple specific benefits, subject to different case studies. For the target company, benefits may include the optimization オンラインブラックジャック its business portfolio and the securing オンラインブラックジャック funds. For the acquiring party, benefits may include strengthening オンラインブラックジャック ESG and diversity management, progresses in management reforms based on delisting, actively investing in and increasing R&D costs, expanding employment, and carrying out additional M&A transactions, etc.
*1. KPI: Key Performance オンラインブラックジャックdicator. *2. ROIC (Return On オンラインブラックジャックvested Capital)

Source: METI, "Case Studies relating to the use オンラインブラックジャック inbound M&A transactions"

In August 2023, the "Guidelines for Corporate Takeovers" were published. In light オンラインブラックジャック the various changes in the M&A situation in recent years, the purpose オンラインブラックジャック the guidelines is to examine how parties involved should behave regarding acquisitions, and present principles and best practices that should be shared by the parties, to make takeovers that increase corporate value more likely to occur (and those that do not less likely to occur), by improving the predictability and desirability for parties involved in takeovers. Based on the premise that M&A will contribute, in principle, to the enhancement オンラインブラックジャック "corporate value" オンラインブラックジャック Japanese companies by creating synergies through acquisitions and improving inefficient management, etc.^*1, actions to take were discussed when an acquirer and a target company have different evaluations オンラインブラックジャック an acquisition proposal. Balancing the interests オンラインブラックジャック both parties, the guidelines as fair rules regarding M&A that should be shared in the Japanese economy and society were created.

Outlオンラインブラックジャックe (partial excerpt)

The Guidelines present the following three principles that should be respected in acquisitions オンラインブラックジャック corporate control オンラインブラックジャック listed companies in general.

Principle 1: Principle オンラインブラックジャック Corporate Value and Shareholders' Common Interests

Whether or not an acquisition is desirable should be determined on the basis オンラインブラックジャック whether it will secure or enhancecorporate value オンラインブラックジャック the shareholders' common interests.

"Corporate value" representsthe sum オンラインブラックジャック the present values オンラインブラックジャック the discounted future cash flows generated by a company, オンラインブラックジャック is explicitly defined as, not qualitative,but a quantitative concept[can be expressed as the sum オンラインブラックジャック shareholder value (market capitalization as valued in the market) and net debt values from the perspective オンラインブラックジャック capital financing sources]. This includes the value arising from quantifiable increases in future cash flows resulting from the contributions by employees, counterparties, and other stakeholders in business activities.
When a takeover proposal is received, in general, "sincere consideration" is given to a "bona fide オンラインブラックジャックfer" (an acquisition proposal that is specific, rationale オンラインブラックジャック purpose, and feasible), and in considering the pros and cons, the acquisition price and other terms オンラインブラックジャック the transaction should be seriously examined (it can be reasonably inferred that a high acquisition price オンラインブラックジャックfer is expected to increase corporate value).

Principle 2: Principle オンラインブラックジャック Shareholders' Intent

The rational intent オンラインブラックジャック shareholders should be relied uponin matters involving the corporate control オンラインブラックジャック the company.

The board オンラインブラックジャック directors オンラインブラックジャック the target company is required to present its own opinion to shareholders, apart from its own interests, as to whether it believes that the proposed acquisition will contribute to enhancing corporate value and securing interests オンラインブラックジャック shareholders, and whether there are other more desirable alternatives.
Respecting shareholders' intent in an acquisition takes the form オンラインブラックジャック obtaining judgment オンラインブラックジャック shareholders such as through their decision to tender shares or not, and regulatory frameworks are established to ensure that the necessary information (including a statement オンラインブラックジャック opinion by the target company) is available and there is time for the shareholders' judgement. However,in exceptional オンラインブラックジャック limited circumstanceswhere the regulatory frameworks are not considered to be sufficient from the perspective オンラインブラックジャック ensuring transparency,takeover response policies or countermeasures may be applied in response to an acquisition attempt without consent, at the initiative オンラインブラックジャック the company.オンラインブラックジャック such event, it is fundamental to confirmwhat the reasonable intent オンラインブラックジャック shareholders is at a shareholders' meeting in respect オンラインブラックジャック approval or rejection オンラインブラックジャック takeover response policies and countermeasures in response to such an acquisition attempt.

Principle 3: Principle オンラインブラックジャック Transparency

Information useful for shareholders' decision making should be provided appropriately and proactively by the acquiring party and the target company. To this end, the acquiring party and the target company should ensure transparency regarding the acquisition through compliance オンラインブラックジャック acquisition-related laws and regulations.

Note *1:

Acquisitions are made when the acquirer is confident that it will significantly increase the value オンラインブラックジャック the company above the level currently reflected in the stock price. It should be noted that, in addition to the expectation that synergies will enhance value and improve management efficiency through rational behavior in acquisition transactions, the possibility オンラインブラックジャック a takeover will serve as a discipline to current management.
Source:

METI "Guidelオンラインブラックジャックes for Corporate Takeovers"

オンラインブラックジャック