JAPAN: highlights

  • Overall, the Industrials sector bounced back ever so slightly compared to Q1-3 2020, which was at 30%[1] versus 35% of outbound deals per sector* (see below)
  • Healthcare and Infrastructure (with renewable energy being the largest segment) have increased again by 6% and 1% respectively, whilst Tech & Software maintained momentum at 17%[2]
  • The Consumer, Leisure and Retail sector continued its decline, by 7% compared to Q1-3 2020[3]

Japan outbound deals by sector - Q4 2020*

  • Geographically, Europe (+ UK) saw the largest gain: accounting for 53% of Japanese overseas M&A destinations, compared to 29% in the preceding three quarters[4]
  • The US however demonstrated their strong foothold for another quarter, with only a 1% decline in Japan’s outbound deals[5]

Japan outbound deals by target region - Q4 2020*


There are some clear ‘ones to watch’ for Japanese outbound activity, as demonstrated by Q4’s activity summary below. What’s clear from this summary is increased activity in overseas M&A from Japanese strategics and the disposal of non-core assets (including to Western private equity firms). This, alongside aiding domestic consolidation (e.g. by executing large public takeovers), has meant activity levels are on the rise.

The following are key highlights:

  • NEC once again stands out - successfully executing three international acquisitions during the lockdown, including a €1.9 billion acquisition of Avaloq in Switzerland[6]
  • Softbank executed four overseas deals last quarter, but it was their domestic merger of Yahoo with LINE[7], the Japanese equivalent of WhatsApp, which was most memorable, particularly given the prominence of the firms involved
  • Traditional sectors such as Automotive continue to consolidate, whilst non-core disposal or take-privates by Western private equity firms are ever more popular, as seen with Coca Cola Bottlers Japan below
  • Based on our insights and conversations, in 2021 we anticipate more Western private equity firms to significantly expand their investment activities in Japan

 Summary of notable M&A activity driven by Japan – Q4 2020[8]

Company to watch Representative transaction Date announced Transaction type Regions Sectors & keywords Value (€m)
NEC Avaloq Group AG 04/10/2020 Overseas acquisition Japan / Switzerland Banking software 1,901
Ricoh MTI Technology Ltd 07/10/2020 Overseas acquisition Japan / UK IT Services, Cyber & Data Security N/A
Daikin Industries Stevens Equipment Supply LLC 02/11/2020 Overseas acquisition Japan / USA HVAC distributor N/A
Outsourcing Inc. CPL Resources Plc 04/11/2020 Overseas acquisition Japan / Ireland (Rep) HR placement service 254
Kyocera Soraa Laser Diode, Inc. 12/11/2020 Overseas acquisition Japan / USA Electronic component N/A
Konica Minolta Specim Spectral Imaging Oy Ltd. 27/11/2020 Overseas acquisition Japan / Finland Measurement and sensing equipment N/A
Sony Pictures Entertainment Ellation Holdings, Inc. 09/12/2020 Overseas acquisition Japan / USA Entertainment, VoD 971
NSK  Bruel & Kjaer Vibro GmbH 10/12/2020 Overseas acquisition Japan / Germany Vibration and condition monitoring 169
ORIX  Elawan Energy, S.L 27/12/2020 Overseas acquisition Japan / Spain Renewable, wind 792
FUJIFILM Holdings Sale of Medical Data Vision (20.68% Stake) to SBI Holdings 10/11/2020 Disposal to PE Japan Medtech 154
Sega Sale of amusement arcade business to GENDA 04/11/2020 Disposal to PE Japan Leisure, computer games  N/A
Isetan Mitsukoshi Holdings  Sale of Isetan Mitsukoshi Real Estate to Blackstone 11/11/2020 Disposal to PE Japan Department store, real estate N/A
Mitsubishi Materials  Sale of Diamet Corporation to Endeavour United 25/11/2020 Disposal to PE Japan Auto component, sinter metal N/A
Coca-Cola Bottlers Japan  Sale of Q'Sai to Advantage Partners 15/12/2020 Disposal to PE Japan Healthfood, supplements 333
Takeda Pharmaceutical  Sale of Chinese prescription pharma business to Hasten Biopharmaceutic 21/12/2020 Disposal (cross-border) Japan / China Pharma, total $11.3bn non-core disposals 264
SoftBank Merger of Yahoo Japan subs with LINE 23/12/2020 Public merger Japan Internet portal, messenger service 7,687
Hitachi Automotive Systems Showa Corporation, Nissin Kogyo, Keihin Corporation 16/10/2020 Public takeover Japan Auto component, drivetrain 3,242
Nitori Holdings  Shimachu Co., Ltd 29/10/2020 Public takeover Japan Retail, furniture 1,697
Sumitomo Mitsui Finance and Leasing Kenedix, Inc. (79.73% Stake) 20/11/2020 Public takeover Japan Real estate 1,266
Idemitsu Kosan Toa Oil Co., Ltd. 15/12/2020 Public takeover Japan Oil & gas 334

This activity was complemented by continuously visible strategic investment appetite, notably:

  • Japanese listed corporates announcing their intention to invest, including through M&A and strategic partners
  • Increased ‘announced intentions’ to focus on the digital transformation, which whilst a long-term trend, has been catalysed by the pandemic
  • Continued momentum of renewable energy interest (e.g. wind power from Toshiba[9], energy transition from Mitsubishi[10]) – for both large and mid-cap Japanese companies – driven by both the risk profile of the target assets, and the Japanese government’s pledge to support sustainable development goals[11]

This activity combined means that Japan looks set to continue its outward facing activity focus in 2021 (see below).





War chest

JPY converted to USD (@104 yen = $1) and rounded up for convenience

Sectors & keywords




Europe, US


IT, digital transformation








Business support services



Permira Advisers



Digital transformation



Tokyo Gas



Renewable Energy







Wind power



Takasago Thermal Engineering

Not specified


Digital transformation, Environmental technologies



Nishio Rent All



Rental and leasing



Mitsubishi Heavy Industries

Not specified


Energy transition, Mobility



Morinaga Milk Industry



Dairy products






Chemicals and materials



Sekisui Chemical

Not specified


Life science, Innovative mobility


CHINA: highlights

  • Overall, outbound deal volumes from China are slightly lower than previous quarters, as the pandemic has catalysed an increase in domestic focused activity
  • However, the newly agreed China/EU investment agreement looks set to open up new opportunities for 2021
  • For those outbound deals closing in Q4, Healthcare was ahead of the previous quarter driven by the renewed investment into wellbeing following the pandemic (see below)[23]
  • Infrastructure deal volumes continue with momentum, and we believe that, along with renewable energy, a clear focus for Chinese investors
  • China continues its interest in consumer brands to take to the Chinese consumer, with 14% of overall outbound deal activity (as below)

China outbound deals by sector - Q4 2020*

China outbound deals by target region - Q4 2020*

  • As demonstrated below, intra-Asia deals still take the lion’s share of China outbound activity. This is largely driven by the extent to which Chinese decision-makers could travel to the target’s location during the pandemic. However, also, in the case of manufacturing for example, the capacity to expand with lower labour costs exists through M&A within South East Asia
  • However, Europe & UK as investment targets make up a healthy 26%, which looks set to increase following the recent EU agreement
  • Despite the political climate China and the US, there were still cross-border deals completed by Chinese investors, mainly driven by the strong momentum in the Healthcare sector


M&A watch list: China

The clear ‘ones to watch’ in China for outbound activity can be seen in the below Q4 summary table. [24] While outbound appetite from China remains behind Japan, there are clearly active players who, with political encouragement from the EU agreement, could turn their attention to extra-Asia opportunities.

Key highlights include:

  • Equipment and machinery ‘know-how’ remains a trend for Chinese acquirers – note Tencent and Weifu activity below – driven by the long-term ambition of Chinese companies to continuously improve manufacturing technology
  • Technology giants continue to be active, with Baidu and Alibaba investing nearly €10bn over Q4 alone (see below)
  • Healthcare remains a hot topic for Chinese investors both domestically and cross-border, this was triggered by the pandemic but is expected to remain active due to the significant local market
Company to watch Representative transaction Date announced Transaction type Regions Sectors & keywords Value (€m)
Tencent Holdings 10 Chambers Collective KB 01/10/2020 Overseas acquisition China / Sweden  Video game N/A
Zoomlion Heavy Industry Science and Technology  Rabe Agrartechnik Vertriebsgesellschaft mbH 01/10/2020 Overseas acquisition China / Germany Equipment  N/A
HitGen Inc. Vernalis (R&D) Limited 12/10/2020 Overseas acquisition China / UK Biotechnology 21
GoerTek Group  Dynaudio Holding A/S 23/10/2020 Overseas acquisition China / Denmark Audio maker 33
Weifu High-Technology Group IRD Fuel Cells  30/10/2020 Overseas acquisition China / Denmark Equipment  N/A
Health and Happiness (H&H) International Holdings  Solid Gold Pets 04/11/2020 Overseas acquisition China / US Pet food  139
Ping An Capital Apollomics 06/11/2020 Overseas acquisition China / US Biopharmaceutical 105
WuXi Biologics (Cayman) Inc. Bayer AG (Drug substance facility in Wuppertal) 21/12/2020 Overseas acquisition China / Germany Pharmaceuticals 110
UCAR Inc. Sale of Car Inc. to MBK Partners 13/11/2020 Disposal to PE China / South Korea Automotive  1,840
China Resources Pharmaceutical Boya Bio-pharmaceutical Group Co. (16% stake) 01/10/2020 Public takeover  China  Pharmaceuticals 330
Minsheng Education Group Company Doxue Network Technology (Beijing) Company Limited (60% Stake) 15/10/2020 Domestic acquisition China  Education 31
Shanghai Electric Group Shanghai Prime Machinery (39.21% Stake) 15/10/2020 Public takeover  China  Machinery 119
Alibaba Group  Acquisition of Sun Art Retail Group Limited (57.35% Stake) from Auchan Retail SA 19/10/2020 Disposal (cross-border) China / France  Retail 5,266
Baidu JOYY Inc. (domestic entertainment live streaming business) 16/11/2020 Domestic acquisition China  Entertainment 3,039

Investment appetite from China - announced in Q4 2020

As discussed above, while the volume of outbound transactions appears lower, there is momentum building for Chinese outbound activity. Below are some key examples of fund-raising and deal intentions, which have been publicly announced:

  • Hillhouse will be raising a new USD13bn fund for cross-border transactions – which would be the largest fund in Asia
  • Several strategic players have allocated funds for global investments, including Cathay, Tencent, etc
  • These funds cover a range of sectors – which are driven by the trends covered in the above sector section – including technology, infrastructure, consumer and healthcare




War chest

Sectors & keywords






Healthcare, consumer



Cathay Capital



Digital transformation, healthcare, consumer






Technology, software, entertainment



Fosun Pharma






New Hope Group









Digital technology



Everbright Limited

One Belt One Road





China Unicom





*The fund raising is undergoing



*Mergermarket tables – criteria

*All data referenced with this asterisk was sourced from Mergermarket Dataset for each time frame outlined, and is comprised of all reported acquisitions with deal values less than £1bn, including those with undisclosed values, across all sectors and geographies 

[1] According to announced volumes Q1-Q3 2020, Mergermarket data, 8 October 2020

[2] According to announced volumes Q1-Q3 2020, Mergermarket data, 8 October 2020

[3] According to announced volumes Q1-Q3 2020, Mergermarket data, 8 October 2020

[4] According to announced volumes Q1-Q3 2020, Mergermarket data, 8 October 2020

[5] According to announced volumes Q1-Q3 2020, Mergermarket data, 8 October 2020

[6] Avaloq’s acquisition by NEC successfully completed, Finextra, 22 December 2020

[7] SoftBank to create $30 billion tech giant via Yahoo Japan, Line Corp deal, Reuters, 18 November 2019

[8] Japan, Acquistion/Divestment/Merger/Demerger/Reverse takeover/Cross-border/Transatlantic, Mergermarket, 01 Jan 2020 – 31 Dec 2020

[9] Toshiba to produce 'state of the art' wind turbine, WindPower Monthly, 11 November 2020

[10] 4 Ways AI Is Accelerating The Energy Transition, Forbes, 18 December 2020

[11] Japan’s Efforts Toward Achieving The SDGs Through PPAP, Public Private Action For Partnership, UN Sustainable Development, 1 June 2020

[12] Fujitsu pinpoints 20 M&A targets in $5.8bn spending drive, Financial Times, 30 December 2020

[13] En Japan, established the "ene Global Ventures" full-scale overseas venture investment, En_Japan, 25 December 2020

[14] British fund invests up to 300 billion yen Large acquisition in Japan etc., Jiji.com, 18 December 2020

[15] Renewable energy investment, expected to exceed the expected 140 billion yen in the medium-term plan Interview with President Uchida of Tokyo Gas, SankeiBiz, 18 December 2020

[16] Toshiba invests 1 trillion yen in 5 years, Nikkei, 17 December 2020

[17] 高砂熱学グループ 新中期経営計画の策定について, tte-net, 13 November 2020

[18] 「中期経営計画」(2021年9月期~2023年9月期)策定のお知らせ, nishio-rent, 10 November 2020

[19] 2021事業計画(FY2021~2023), Mitsubishi Heavy Industries Group, 30 October 2020

[20] 森永乳業社⻑宮原道夫さん―製菓と統合、シナジー次第、他企業との提携も意識(トップに聞く), The Nikkei MJ, 19 October 2020

[21] 東洋紡、脱「作り⼿の論理」、楢原誠慈社⻑、モビリティ売上⾼、25年度3倍へ。, The Nikkei Business Daily, 9 October 2020,

[22] Strengthen EV and 5G to prepare for market changes, Toyokeizai, 3 October 2020

[23] According to announced volumes Q1-Q3 2020, Mergermarket data, 8 October 2020

[24] China, Acquisition/Divestment/Merger/Demerger/Reverse take-over/Cross-border/Transatlantic, Mergermarket, 1 Jan 2020-31 Dec 2020

[25] 媒体:高瓴资本正筹集新基金 拟募资超200亿元, Jianshiapp, 18 September 2020

[26] Over-raising again, Cathay Innovation Fund completed 650 million euros in fundraising, iyiou, 12 January 2021

[27] Rumor has it that Tencent intends to set up an investment fund: at least US$650 million in scale, allside, 10 January 2021

[28] Fosun Pharma (02196) intends to participate in the establishment of private equity investment funds to strengthen the Group's overall health industry layout, Sina, 28 December 2020

[29] The total scale is 3 billion! New Hope intends to jointly initiate the establishment of an equity investment fund with Qingdao Guiding Fund Center and others, Sohu, 2 November 2020

[30] Hikvision's announcement on the completion of the fundraising of the industrial investment funds that participated in the establishment, zqcn, 3 November 2020

[31] Everbright's Belt and Road Green Equity Investment Fund successfully raised RMB 3 billion in the first round, Hexun – Global Stock Market, 7 December 2020

[32] Unicom's 10 billion 5G industry fund throws more than 700 million yuan to become the largest shareholder of this A-share company, Sina, 25 December 2020