Japanese firms are once again on a global buying spree. Headlines are reminiscent of the late 1980s–the last time Japanese companies did a lot of overseas acquisitions. In a variety of industries, Japanese have seemingly suddenly decided that they want to expand internationally. In some cases, it’s a desire to use some of the cash that has been accumulating due to recently improved corporate profits. Also, many Japanese firms are realizing that they need to gain more bulk if they are going to be competitive on a global basis. After watching from the sidelines as Western firms engaged in an extended bout of merger mania over the past couple of decades, Japanese companies feel that they need to play the same game in order to avoid being dwarfed. A desire to get further involved in markets that are growing faster than Japan’s is also a motivation. And of course there’s always the glamour of international M&A. Even if what you’re purchasing isn’t Rockefeller Center, hey it’s still fun to buy something overseas.

As a result of this new merger wave, Americans and Europeans in a wide range of industries are suddenly discovering that their company has just been sold to a Japanese buyer. They wonder “What’s going to happen?” “Should we be panicking?” and “How do we prepare?”

In this article, I will discuss some of the things that you can expect if your company is purchased by a Japanese firm, and some things that you can do to prepare yourself and your organization for making a successful transition.

Nothing Drastic Right Away
Westerners are conditioned to expect that an acquirer will come in and start making drastic changes very quickly. However, Japanese firms tend to have a different modus operandi. When a Japanese company acquires a foreign firm, it is unlikely to want to rock the boat right away. Seldom will there be a sudden layoff or change in management. Japanese firms tend to prefer to keep the current management intact, for various reasons including that they usually don’t have enough bilingual management talent internally to send to take over. So they need the current management and staff to stay on.

Westerners also tend to expect an acquirer to come in with a clear and detailed plan of what they are going to do with the acquired company. What the strategy will be, how post-merger integration will be handled, etc. However, the reality is that Japanese firms will seldom come in and quickly unveil a detailed strategic document of the type that Westerners might be looking for. Typically, the Japanese plan will be to spend some time getting to know and understand the operations of the acquired firm before fleshing out their plans. Until that happens, any strategic pronouncements that do come from senior Japanese management will tend to be quite vague.

What You Can Expect
One thing that you can expect after being acquired by a Japanese firm is a lot of questions! Japanese are famous for being detail-oriented, and you will be sure to get a dose of that rather quickly. Because Japanese like to study things thoroughly before making any decision, they will want to get as much information as possible about how your company ticks before they reach any conclusions about potential changes. Expect to play host to flotillas of visitors from the head office asking to see detailed documents. And probably several younger Japanese will…

Want to see more by subscribing to Japan Close-Up?

For information on Japan Close-Up please refer to the Japan Close-Up website.