Japan Leads Asia’s M&A Surge with $650 Billion Boom in First Half of 2025

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering Asia

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Image Credit: REUTERS/Athit Perawongmetha/File Photo

Merger and acquisition (M&A) activity in Asia surged to new heights in the first half of 2025, with total deal value reaching $650 billion more than double that of the same period last year according to LSEG data. Japanese companies played a key role in this record-breaking growth, with the value of their deals more than tripling year-on-year.

The rise in Japanese M&A activity is driven by a confluence of corporate reform efforts, outbound growth strategies, and a resilient domestic market. Analysts and investment bankers say this momentum is likely to continue into the second half of the year, with a robust pipeline of megadeals already underway.

Government initiatives promoting better corporate governance, including the privatization of listed subsidiaries, have fueled many of the largest transactions. Major Japanese conglomerates such as Toyota Motor Group and Nippon Telegraph and Telephone (NTT) took private affiliated companies in landmark deals worth $34.6 billion and $16.5 billion respectively ranking among the largest M&A transactions globally.

“There are many other deals like these on the way and their number is increasing,” said Kei Nitta, global head of M&A at Nomura Securities.

Japan has remained relatively insulated from the broader geopolitical and macroeconomic volatility affecting global markets, making it a stable environment for dealmaking. SoftBank Group also made headlines by leading a massive $40 billion fundraising round for OpenAI, marking the largest private tech funding round in history.

The long-term trend of Japanese corporations pursuing international acquisitions to offset demographic decline at home has also remained steady. Recent major moves by Dai-ichi Life, Nomura Holdings, and other financial institutions show that appetite for growth remains strong across sectors.

“Debates over tariffs and foreign conflicts mean that some investment decisions are taking longer, but the overall investment appetite remains very strong,” Nitta said.

Japanese companies have also become attractive acquisition targets themselves, as global firms reassess supply chains and diversify their resource allocation strategies.

However, challenges remain. Rising uncertainty around global economic conditions has led to valuation mismatches between buyers and sellers, resulting in a growing number of failed negotiations, according to Atsushi Tatsuguchi, head of M&A advisory at Mitsubishi UFJ Morgan Stanley Securities.

As part of Japan’s corporate reform drive, firms are under increased pressure to divest non-core assets a move private equity firms are eagerly capitalizing on. Earlier this year, Seven & I Holdings sold a package of superstores and peripheral businesses to Bain Capital for approximately $5.5 billion, amid its own buyout discussions with Canadian retailer Alimentation Couche-Tard.

“Carve-outs of non-core assets will continue to be a trend in the near term,” said Yusuke Ishimaru, senior deputy head of M&A advisory at SMBC Nikko Securities.

Among anticipated deals for the second half of 2025 is the potential acquisition of Japanese cybersecurity firm Trend Micro, valued at 1.32 trillion yen ($8.54 billion). Bain Capital and EQT are among the reported bidders.

“Private equity funds are also seen as promising buyers for taking listed companies private,” Ishimaru added.

With solid momentum, favorable regulatory tailwinds, and a growing appetite among both strategic and financial buyers, Japan’s M&A landscape is poised to remain a dominant force in Asia’s dealmaking environment for the foreseeable future.