PE deal value in Japan in the first three months of the year is almost on par with the whole of 2024, thanks to just six mega-deals.
Japanese PE saw $21.4 billion transacted across 55 deals in Q1, compared to $22.4 billion across 78 deals for the whole of 2024.
The six mega-deals, each valued over $1 billion, accounted for $19.3 billion, or 90%, of the total deal value.
One of the tailwinds driving the market is the yen’s weakness against the US dollar, according to PitchBook’s Q1 2025 Japan Market Snapshot.
Five out of the six mega-deals in Q1 involved foreign investors.
The largest deal was Bain Capital‘s 814.7 billion yen (around $5.7 billion) acquisition of York Holdings, the supermarket and specialty store businesses unit of retail giant Seven & i in March. The deal was the country’s third-largest PE buyout in a decade.
Bain also acquired 300-year-old Tanabe Pharma in a 510 billion yen (around $3.6 billion) deal in February.
Other foreign investors striking Japanese mega-deals in Q1 included EQT, KKR, Hillhouse Investment Group and Rava Partners.
Japan is becoming an emerging hub for PE as the country emerges from a long period of deflation and stagnation. The new regime of sustained inflation enables more flexibility in price hikes and wage growth, which in turn brings renewed confidence in its recovery and improved investor sentiments, according to our latest snapshot.
The government’s corporate governance reforms also promoted greater transparency and capital efficiency among companies, lowering the traditional obstacles for buyouts.
In addition to interest from foreign buyers, Japanese lawmakers are also calling on the domestic pension fund, the Government Pension Fund of Japan, to increase its exposure to private markets.
While Japan’s PE market looks positive in the long run, its activity level in the short term can be impacted by the global uncertainty around US trade policy.
Featured image by Fannrei/Getty Images
Learn about our editorial standards.
