For the first time, Japan’s public M&A accounted for more than half of all such deals in APAC last year – double its long-term average of 25%.

The surge has been fueled by a rise in shareholder activism.

The implied equity value (IEV) of announced public M&A in Japan surged 52.5% YoY to USD 165.4bn in 2025, as shown in the table below.

A Flash analysis of the 77 indicative and binding public M&A announcements in 2025 with IEV above USD 200m shows that 43% (33) were clearly linked to activist campaigns: 20 cases involved activists actively pushing for a deal, while another 13 cases involved activists agitating for improved terms.

Last year activists were catalysts for take-privates involving Topcon, Fujitec, Hogy Medical, Star Micronics, and With us Corp, among others. In some take-privates, such as Soft99, Digital Holdings, activists were propelling deal activity by tabling competing bids. In other public M&A deals, such as Toyota Motor’s ongoing high profile buyout of Toyota Industries and the management buyout of Pacific Industrial, they were aggressively agitating for improved terms.

Surging shareholder activism 

Ten years ago, shareholder activism in Japan was a niche pursuit, with only a few players targeting a small group of companies. By 2022, the landscape had changed dramatically – 14 activists made 174 filings against 51 firms. And by last year, the momentum had nearly doubled with 25 funds disclosing 338 filings across 95 listed Japanese companies.

According to activism data from Barclays and Lazard, there were 56 fully fledged shareholder activist campaigns in Japan last year – 16 more than in the whole of Europe. Campaign activity in Japan was so strong it matched the level of activity in the rest of the world excluding the US.

Corporate governance reform

Underpinning this activity is more than a decade of sustained corporate governance reforms that were first initiated in 2013 under the administration of late Japanese Prime Minister Shinzo Abe.

The reforms, some of which are highlighted in the chart below, first galvanized shareholder activists. More recently they have galvanized company boards to take corporate and shareholder value creation more seriously.

The impact these reforms have had on Japanese public M&A activity is striking.

As the Flash pointed out in 2018, in seven of the eight preceding years Japanese public M&A deals had a stunning 100% completion rate. That level of deal certainty highlighted the prevalence of friendly, intra‑group transactions supported by cross‑shareholdings. It also reflected the ability of boards to shrug off shareholder activists that clamoured for better terms or force through deals that do not benefit minority shareholders.

But that all changed in 2023 when the Tokyo Stock Exchange announced it would strengthen corporate governance regulation, sparking a wave of reforms aimed at boosting corporate value and, in turn, fuelling a surge in M&A activity across Japan.

Against this backdrop, Japan recorded four failed takeover approaches in 2025, the most ever in a single year excluding lapsed competing bids. These included CoucheTard’s USD 46.9bn bid for Seven & i, Honda’s proposed USD 10.3bn merger with Nissan, and 3D Investment’s partial offers for two REITs.

Last year, the equity value of take-privates and listed subsidiary buyouts, which have long dominated Japan’s public M&A landscape, rose aggressively, underscoring the changing company board mindset around M&A as a value-creation option.

In 2025, take private activity rose 60% year-on-year to 48 deals, up from 30 in 2024. In the same year 19 subsidiary buyouts were announced, (USD 105.9bn in IEV), up 46% from 13 buyouts made by a related/controlling shareholder amounting to USD 20.9bn IEV in 2024.

Governance reforms and activists are not only driving more public M&A activity, they are also impacting the terms at which these deals are effected.

For Japanese public M&A deals with IEV above USD 1bn, insider driven transactions commanded a higher median premium of 38% over undisturbed prices in 2025, up from 23.7% in 2024. It reflects rising pressure on controlling shareholders to demonstrate fairness and process integrity.

Elliott’s public opposition to Toyota Fudosan’s tender offer for Toyota Industries and its reported consideration of a counteroffer, is not a one off. It is reflective of the fundamental changes that have taken place in Japan over the past decade.