Japanese firms went on a record buying spree of foreign companies in the first half of the year, according to a new survey, as the strong yen prompts them to eye overseas acquisitions.
The number of merger and acquisition (M&A) deals stood at 262 in the first six months of this year, the highest number since 1985 when comparative data first became available, the study by Tokyo-based advisory Recof showed.
The data topped a previous first-half record of 247 deals in 1990, when Japanese stock market and real-estate prices hit record levels before the bubble burst, sending the economy into a tailspin.
Deals in the first half were valued at ￥3.49 trillion (US$43.7 billion), compared with ￥3.2 trillion in the first six months of last year, but still below a peak of ￥4.47 trillion in the first six months of 2006, Recof said.
The advisory company said the largest deal in the period was Sumitomo Mitsui Financial Group’s purchase of the Royal Bank of Scotland’s aircraft leasing arm for about US$7.3 billion.
In other deals, Japanese trading house Marubeni Corp said in May it had agreed to buy US grain giant Gavilon LLC for about US$3.6 billion, while trader Mitsubishi Corp purchased a 40 percent stake in Encana Corp’s Canadian shale gas assets for about US$2.9 billion.
Japanese companies have been aggressively seeking mergers and acquisitions abroad in recent years, taking advantage of the yen’s strength to diversify their operations and make them globally competitive.
The nation’s aging population and slowing domestic demand have prompted firms to look beyond its borders for growth.