In our podcast series Corporate Playbook, a veteran lawyer explores rising foreign acquisitions of Japanese companies and their potential to revive the economy.
Tokyo's skyline on March 13, 2024. (Inside photo ©Sankei/Kengo Matsumoto)
Japan Forward began serializing the novel Japan for Sale! The Destiny of the Baby Boomer Generation last month. Three chapters are being published each week through February, making it a five-month series.
The novel follows a romance between two people in their mid-70s, both born during Japan's baby boom and part of the generation that helped shape the country we know today.
Through their story, the book explores the realities of Japanese businesses, the growing wave of foreign acquisitions, and the search for a path to economic revival. It also touches on last year's failed bid to acquire Seven & i Holdings.
Perhaps because of its provocative title and subject matter, every chapter published so far has ranked among Japan Forward's trending articles.
First published in Japanese in April, the novel was written by Shin Ushijima, a veteran lawyer and accomplished author known for his corporate fiction.
Exploring Corporate Japan
Ushijima also hosts Corporate Playbook, a podcast series on our YouTube channel. In monthly episodes lasting about 20 minutes, he examines the latest developments in Japanese business through the lens of corporate governance.
He also explores the causes of corporate misconduct and scandals, how companies should respond, and what lessons they can learn to avoid similar problems in the future.
Recent episodes have examined Nidec, the major motor manufacturer embroiled in accounting irregularities, and Nissan Motor, where a company-nominated candidate for outside director was rejected.
The latest episode examines what happens when foreign investors acquire Japanese companies.
Surge in Foreign Acquisitions
Many people may not realize just how sharply acquisitions of Japanese companies by overseas businesses and investment funds have increased in recent years.
Data show that from January through September, both the number and value of these deals reached record highs.
Economic journalist Hironori Kato identifies several factors behind this trend. The yen's prolonged weakness has made Japanese companies more affordable to foreign buyers.
From their perspective, Japan offers an attractive opportunity: its companies possess valuable technologies, strong brands, and substantial assets, yet many can be acquired at relatively low prices.
The financial resources of foreign investors and the stability of the Japanese market have also helped fuel this trend.
Ushijima points to another factor. Japanese business owners who cannot find successors may have little choice but to sell to foreign buyers offering attractive prices if they want their businesses to survive.
He also notes that relatively few Japanese investors are willing to pay premium prices for domestic companies, creating further opportunities for overseas buyers.
Ushijima argues that Japan has suffered two major defeats. The first came in 1945, with its defeat in World War II. The second followed the collapse of the bubble economy, ushering in three decades of economic stagnation.
Now, he says, Japan faces a "third defeat," characterized by a weakening yen and declines in GDP and real wages.
Can Foreign Investment Revive Japan?
Even so, Ushijima sees foreign acquisitions as a potential catalyst for change. He argues that foreign investors can help overhaul outdated management practices by acquiring Japanese companies and installing more capable leaders. In his view, this could mark the beginning of Japan's economic revival.
Japan is home to many companies with outstanding technologies and untapped potential.
With the right investment, expertise, and support, they can build on their strengths, become more competitive, and thrive in global markets. For Japanese companies seeking a way forward, recognizing and realizing this potential is essential.
Japan Forward hopes to continue sharing the stories of these companies, exploring how they can transform and thrive.
Watch for the next issue on November 18.
Japan Forward is a media outlet driven by an unparalleled passion to advance the future of Japan and its role in the world. For inquiries, please call our office at 03-3275-8511 (Sankei iD) or email us at info@japan-forward.com.
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Author: Yasuo Naito, Editor in Chief