For foreign companies looking to further expand their business in Japan, there is a limit to how much growth can be accelerated through their own efforts alone. Especially when aiming for step-change growth, a strategy that draws on the strength of local partners — through M&A or business partnerships — becomes an important option.
- The company feels its own sales and hiring capabilities are limiting the pace of expansion
- It wants to consider M&A or a partnership but is unsure where to start
- There is no way to access information about acquisition or partnership candidates
- There is no internal structure to run due diligence or post-merger integration alone
This article explains how foreign companies expanding their Japan business can make use of local partners.
Why Local Partners Become Necessary
The Japanese market has its own business practices, industry structures, and decision-making processes that are difficult to fully grasp from an overseas headquarters' perspective alone. Organic growth — expansion through the company's own hiring and sales efforts — also takes time, so depending on the business phase, achieving step-change growth through M&A or a business partnership can be an effective option.
In that case, a local partner who knows Japanese practice well — from identifying acquisition candidates through negotiation, due diligence, and post-merger operations — becomes key to success.
Types of Partners Worth Using
"Local partner" covers several different roles, and the one needed depends on the business phase.
| Partner Type | Role |
|---|---|
| M&A strategy and deal support partner | Drives strategic expansion by evaluating acquisition candidates, structuring capital partnerships, and supporting negotiations |
| Due diligence and valuation support partner | Supports investment decisions and risk assessment through financial, tax, and business analysis, and provides valuation |
| PMI and governance support partner | Supports post-acquisition operations through organizational integration, building management processes, and internal controls |
| Business partnership and distributor partner | Complements sales channels and a customer base the company cannot build on its own |
Points for Selecting and Working With a Partner
When selecting a local partner, it is important to look beyond whether they can operate in Japanese and assess whether they understand the circumstances specific to foreign companies, such as differences in governance standards and decision-making processes versus the overseas headquarters.
Because M&A and business partnerships span multiple phases — from strategy through execution to post-merger operations — choosing a partner who can stay engaged consistently across all of them, rather than handing each phase to a different specialist, helps improve both the speed and accuracy of decision-making.
Summary
- When growth through the company's own efforts alone reaches its limit, consider using local partners through M&A or a business partnership
- Understand the different roles required at each phase: M&A strategy and deal support, due diligence and valuation support, and PMI and governance support
- When selecting a partner, assess their understanding of circumstances specific to foreign companies, not just their ability to operate in Japanese
- Choosing a partner who can stay engaged from strategy through execution and post-merger operations improves the speed and accuracy of decision-making
Contact
JBN provides one-stop support for foreign companies expanding their Japan business, from M&A strategy through due diligence, valuation, PMI, and governance support.
To discuss using a local partner, please contact us.