Key takeaways
- Japan M&A reached over $385 billion in 2025, with public M&A in Japan accounting for over half of Asia Pacific’s deal count.
- Public activist campaigns in Japan rose around 90% in 2025 compared to the previous year, making Japan the second most active country globally, after the U.S.
- Cross‑border M&A accelerated sharply, with record outbound activity and the U.S. re‑emerging as a favored destination.
After record M&A in 2025 and a pro growth snap-election win that propelled Japanese stocks to fresh highs, Japan is set for a big year of dealmaking — with shareholder activism front and center.
Public campaigns are intensifying and together with governance reforms and a buoyant equity market, they are driving buyouts at scale.
Japan’s M&A boom and the rise of activist investors
The impact of these reforms is evident in the numbers: Japan saw record outbound investment banking activity in 2025 — almost double that of 2024.
Japan-related M&A hit $385.9 billion in 2025, with revenue climbing around 33% year-on-year, according to Dealogic data.
Public M&A in Japan also accounted for more than half of Asia Pacific’s M&A deal count, the highest in 18 years and double its long-term average of 25% according to Dealreporter data1, underscoring the country’s growing influence in the region’s dealmaking landscape.
Japan-targeted deal value has nearly doubled in 2025
Source: Japan‑targeted M&A deal value, Dealogic, as of January 2026, deal value USD (m)
“The reform story has been taken to the next level. Guidance from the Ministry of Economy, Trade and Industry (METI) and the Tokyo Stock Exchange (TSE) is encouraging companies to consider new ideas, while activists are becoming bolder,” said Satoshi Shimada, head of M&A for Japan at J.P. Morgan.
Boards are reassessing their core businesses, leading to increased acquisitions and the spin-off of non-core assets, as firms focus on creating shareholder value.
Like Europe, Japan differs to the U.S. in its approach to activism. Companies tend to engage on the merits of value creation proposals, resulting in fewer settlements compared to the U.S., leaving more decisions to shareholders, said Darren Novak, Global co-head of Shareholder Activism Engagement and M&A Capital Markets at J.P. Morgan.
“Around 43%2 of public M&A transactions in Japan involved activism last year — whether an activist seeking a sale of a company or division or an activist agitating for a higher price in connection with a public offer for a company,” said Novak.
Takaichi’s election win, interest rates and shareholder activism
Prime Minister Sanae Takaichi's landslide Lower House victory in February propelled Japanese stocks to fresh record highs on expectations of stepped up government spending. With an overwhelming lower‑house majority, the administration has a clear mandate to roll out a stimulus plan focused on AI, semiconductors and defense, reinforcing corporate investment plans.
The win comes after the Bank of Japan (BoJ) raised its rate to 0.75% in December 2025, the highest level in three decades and signaling a departure from its ultra-loose monetary policy.
Higher rates are lifting borrowing costs and pressuring margins, even as banks stand to benefit. A weaker yen is pushing up import costs and feeding inflation, especially for import‑reliant manufacturers.
Against this backdrop, shareholder activism is gaining traction and maturing — more director nominations, heavier proposal flow and broader agendas beyond capital allocation. The number of public activist campaigns in Japan jumped nearly 90% between 2024 and 2025 making Japan the second most active market globally after the U.S.3
Japan’s activism intensity hit a fresh record in 2025
Source: FactSet financial data and analytics. as of December 2025. Campaigns include those above $250m (USD) market capitalization at the time of campaign announcement, excluding activism without publicly disclosed campaigns, hostile / unsolicited offers, short research / positions, campaigns solely supporting other activists, campaigns solely aimed at voting for or against management / shareholder proposals, ESG-only campaigns, and campaigns against funds; 2 Include M&A, spin-off, carve-out, re-listing, etc
“The focus has shifted from balance sheet efficiency to a broader dialogue about portfolio strategy, including divestitures and the sale of entire companies,” said Shimada.
J.P. Morgan recently acted as the exclusive financial advisor to Topcon on its $2.75 billion (JPY 421 billion) management buyout (MBO) transaction by KKR. Activist investors had been urging Topcon to break up operations. In response, Topcon kicked off a bidding process involving three investment funds to conduct an MBO. J.P. Morgan worked with Topcon, an optical device and agriculture tech and equipment company, from activism defense advisory engagement through to the MBO transaction.
“Corporates are less dismissive of activist demands and more accepting of possible outcomes now. They understand they need to show something—whether it’s a stand-alone solution or otherwise — that addresses the interests of the broader institutional shareholder base,” added Shimada.
Cross-border M&A and private market activity in Japan
Japan’s cross‑border M&A accelerated sharply in 2025, with record outbound activity. The U.S. has re‑emerged as a favored destination, supported by easier execution.
Cross-border M&A deal volume by country
Source: 2026 J.P. Morgan M&A Outlook, $B
Private equity firms are now a fixture in Japan's M&A landscape, with sponsor led take privates and strategic partnerships rising, often in response to activist campaigns.
J.P. Morgan acted as an exclusive financial advisor to the Special Committee of Makino Milling Machine, the machine tools manufacturer, on a $1.8 billion (JPY 263.7 billion) take-private transaction by Asian PE group MBK Partners. The deal secured for Makino followed a heated unsolicited takeover attempt, demonstrating J.P. Morgan’s execution capabilities in unsolicited and activist-related transactions.
Outbound M&A in Japan boomed in 2025
Source: Dealogic, as of December 2025. Note: 1. Deals announced as of 12/31/2025 where primary acquirer or target is located in Asia Pacific and deal value is above $100 m, does not include intra-APAC transactions; 2. Includes acquisition of Open AI Inc minority shareholding led by SoftBank Group and acquisition of Air Lease Corp led by Sumitomo Mitsui Financial Group.
“The market saw a series of high-profile take-private transactions and tender offers in 2025 in Japan, supported by governance reforms, a weaker yen and sponsor dry powder,” said Rohit Chatterji, head of M&A in Asia Pacific at J.P. Morgan.
“We see this gaining momentum, from take-privates of core listed affiliates to standalone companies whose market prices don’t reflect intrinsic value,” added Chatterji.
Private equity’s growing role reflects a shift in corporate attitudes: for many Japanese companies, PE ownership now offers a credible path to independence and long-term growth, with flexibility to restructure and the option to return to public markets through future IPOs.
Take private deal volume in Asia Pacific
Source: Dealogic, as of 31 December 2025, announced deals. Note: 1. Geography is based on stock exchange of target company, includes deals where target is listed on selected exchanges with final stake above 50% and target has been delisted following the acquisition due to privatization and squeeze-out; 2. Includes privatization of Afterpay Ltd, Sydney Airport Ltd and AusNet Services Ltd, adding up to c. $50B deal value; 3. Includes privatization of Toyota Industries Corp (in progress), NTT Data Group Corp, adding up to c. $50B deal value.
Interest from newer PE entrants is rising, with several firms establishing local offices and increasing both deal count and deal value.
“A lot of companies do see the merit of being acquired by a private equity firm over strategic, which is very different from say, 15 years ago, when private equity wasn’t really considered an option,” Shimada adds.
With both domestic and international funds actively seeking deals, private equity is set to remain a key driver of M&A activity in Japan heading into 2026.
“Japan is very trend-driven—private equity, large reorganizations, take-privates. We aim to stay ahead of these trends, advising and supporting our clients as the market evolves,” said Shimada.
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