$4.7 Trillion dollars! A record year for global deal making in the mergers and acquisitions industry. 2015 outpaced the previous year by a galloping 42%. In healthcare, the largest M&A ever took place between two giants, Pfizer and Allergan to the tune of roughly $160 Billion dollars. In tech. another historically mamouth deal between Dell and EMC Corp., for $67 Billion. Not to mention Anheuser-Busch InBevNV’s $108 billion acquisition of SABMiller PLC in the beverage industry.
Billion dollar M&A deals make the headlines, but the SME M&A market is also very active, especially in Japan. The bulk of M&A in Japan are SMEs, with just one M&A company carrying out 173 in the 2015 fiscal year. Nihon M&A recently conducted a seminar on the logistics and strategy of M&A for SMEs at the Nagoya Marriott. (picture above)
The motivation for an SME M&A in Japan is very different than a typical M&A. M&A are typically sought out to boost corporate performance or jump-start long-term growth, but an SME in the business climate in Japan where the economy is rattled by population decline (decrease labor force), decreased demand, and an aging workforce, is quite different.
More often than not, an SME M&A in Japan is carried out to keep employees in their jobs.
The average age of a CEO in Japan is 66. Many of the SME M&A stories concern health or an unexpected death. One CEO suddenly lost his eye sight, and was unable to continue the family owned business as there were no children or family members available to take over the business. The major concern was --who will take care of the employees--.