Actual State of M and A

Let us first try to see the actual state of M & A in America and Japan.

1. M & A in America
Itami, Kagono “Zeminaru Keieigaku nyumon” (Seminar Management Science Introduction), Nihon Keizai Shimbunsha (Japanese Economics Newspaper Company), 1989.

2. M & A in Japan
In May 1992, there was a big happening when the DAIEI, a big player in the distribution industry took over the Recruit Company under its umbrella, which was under huge debts. The DAIEI, so far, had been carrying out the organisation of its operations on the basis of volitional merger and acquisition. The “total life industry” as pointed out by DAIEI can probably be called as having entered the final stage by acquiring the information industry with its own umbrella.
Just before the merger of Mitsui and Taiyo Kobe bank and the merger of Kyowa Saitama bank were very much in the news, the reorganisation of financial industry was progressing in a big way. In this way, it can be said that the merger and acquisition was being carried out very actively. Let us try to find out if there were any conspicuous characteristics or trend in the M & A in Japan.

After that, the oil shock bought down the activity and M & A became calm. However, recently, M & A have shown a tendency of gradual increase with the recovery in economy. Though, it is said that merger and acquisition of enterprises do not go well with the traditional industrial customs and working in Japan, it can probably be said that M & A has become an established concept in Japan.

Still, even in the case of Daiei or the other M & A, all the mergers and acquisitions in Japan are of friendly nature. They are either merger on equal terms or merger for the sake of rescue. The example of acquisition of Koito Seisaku by T.B. Pickens, Jr is a very rare example in which foreign capital is involved. It can be said that there are almost no hostile cases of M & A in Japan.

The hostile M & A could not take roots in Japan. It is probably possible to explain this tendency on the basis of the way of thinking and the customs etc. which are followed by the Japanese enterprises like trying to restrict the special right of stock holders etc. However, the sense of morale of the Japanese like “taking over is bad” can be called as the most important factor for not allowing the hostile merger and acquisition.