Japan is on a deal hunt and setting new M&A records. In 2016, there were 703 deals globally, a 5% increase on 2015 and the highest total on Mergermarket record. Value rose to a four-year high, finishing the year at US$144.9 billion.
On a geographical level, Japan set new records for outbound deals into the US and the UK in 2016. There were 91 deals from Japan into the US – a year-on-year increase of 30%. However, despite the spike in deals, value was down by 26% from US$33.2 billion in 2015 to US$24.6 this year. One of the largest deals of the year saw mining equipment manufacturer Komatsu pick up US rival Joy Global for US$3.73 billion.
Dealmaking value from Japan into the UK was even more pronounced in 2016 – a record-breaking US$31.3 billion from 23 deals (the equal-highest total on Mergermarket record). However, the overwhelming majority of that value came from Softbank’s US$30 billion purchase of UK microprocessor company ARM Holdings.
An aging and shrinking population, two decades of deflation and a lack of growth in the domestic market are the major drivers behind the overseas buying spree by Japanese corporates.