Nissan Mega Deal Sparks Next Battle for Bankers in Japan’s M&A Boom

Japan is in the midst of a record-breaking year for corporate deal-making, but when it comes to mergers, acquisitions, and business agreements, local banks and law firms are still leading the charge. This year, Japan has seen a 48% increase in transaction volume, reaching approximately $200 billion, significantly outpacing the numbers in other Asian economies.

The surge in deal activity has created a competitive landscape for investment bankers hungry for lucrative fees. As the year comes to a close, all eyes are on Honda Motor Co as it enters acquisition talks with Nissan Motor Co, potentially creating the world’s third-largest carmaker. While international banks do secure advisory roles in some deals, Japanese firms maintain a strong hometown advantage.

Local banks in Japan hold the upper hand due to their close relationships with corporate entities through lending and underwriting. This dynamic often makes it challenging for foreign banks to secure deals, especially in crucial sectors like technology. However, global investment banks can sometimes gain an edge in specific situations, such as Japan Industrial Partners’ takeover of Toshiba Corp earlier this year, where a mix of local and international banks were involved in the deal.

The proposed partnership between Honda and Nissan, long discussed in the industry, is seen as a strategic move to stay competitive in the global market. The two automakers aim to establish a joint holding company by August 2026, with Honda leading the formation and playing a significant role in the new entity.

When it comes to significant transactions involving Japanese companies, there is often a preference for local solutions to preserve national assets. Deals like Alimentation Couche-Tard Inc’s interest in acquiring the owner of 7-Eleven convenience stores have attracted foreign attention but face resistance within Japan. Banks like Goldman Sachs Group Inc and Morgan Stanley are working on potential cross-border transactions in the region, showcasing the diverse interests at play in Japan’s deal-making arena.

Overall, the surge in corporate deal-making in Japan reflects a shifting landscape where global and local players navigate complex negotiations to secure their positions in an ever-changing market.