Nihon M&A Centre Malaysia managing director Yusuke Ojima
PETALING JAYA: The local merger and acquisition (M&A) landscape is gaining strong momentum as more Japanese firms step up investments in corporate Malaysia.
Due to its strategic location and diverse economy, investors from Japan are also using Malaysia as a springboard to penetrate other South-East Asian markets.
Elaborating on the domestic Japanese M&A activities, Nihon M&A Centre Malaysia managing director Yusuke Ojima told StarBiz the country’s strategic location and well-established business infrastructure has made it an excellent base for venturing into neighbouring markets.
“Its diverse economy offers a wide array of potential industries for us to explore such as manufacturing, technology and consumer goods.
“We can also benefit from the Malaysian government’s support for foreign investment, as its incentives and policies aim to attract investors and facilitate smoother M&A processes,” he added.
Moreover, he noted that the country has been a preferred destination for Japanese companies seeking to expand in South-East Asia, making Nihon M&A Centre’s Japanese background well-suited to resonate with such firms looking for M&A opportunities in the region.
Overall, he said Malaysia’s M&A landscape within the region holds great promise for investors and advisory firms like Nihon M&A Centre Malaysia, he said.
Nihon M&A Centre Malaysia was established in March 2020 to facilitate, among others, M&As for Japanese firms in the country. Ojima said there are currently about 40 potential local M&A deals in the pipeline in various industries.
These industries include information technology and solutions services, manufacturing, trading and distribution, facility management, metal industry, packaging and printing, electric and electronics, as well as resources recovery and management.
From 2018 to 2022, Nihon M&A Centre Malaysia achieved huge success in closing eight deals ranging from RM10mil to about RM100mil.
Notably, the first two deals in 2018 and 2019 were accomplished before the company established a physical office in the country.
These initial acquisitions involved a carton box converter manufacturing company and a wire harness manufacturing company, both executed as 100% acquisitions.
Despite the challenges brought by the Covid-19 pandemic in 2020, the company persevered and set up a representative office in Malaysia.
This paved the way for three successful deals in 2021, which included a 100% virtual M&A deal for an aluminum die-casting manufacturing company, a 100% acquisition of a lighting distribution business, and a step-acquisition for a lightning protection (surge arrestor) manufacturer, primarily serving the telecommunications industry.
Building on this momentum, Ojima said the advisory firm achieved further success in 2022, closing three more deals.
He said demand for Japanese investment in Malaysia has been increasing, with a notable rise in ongoing deals this year, seeing 50% more ongoing deals compared to 2022.
“The company sources strategic investors to acquire Malaysian companies, fostering mutually beneficial partnerships.
“Notably, once the letter of intent is established, it usually takes around four to six months for a deal to be completed. Nihon M&A Centre Malaysia has a 100% success rate for deals after the letter of intent stage.
“We are committed to ensuring successful transactions for all parties involved, hence strengthening valuable connections between Japan and Malaysia’s business sectors,” he said.
He said Japan holds a crucial position as one of Malaysia’s most significant trading partners, ranking fourth with a trade volume of US$41.21bil (RM181.51bil) in 2022.
This substantial trade relationship reflects the confidence global companies have in Malaysia’s favourable business ecosystem, he noted.
Other pull factors that attract Japanese firms to the country are its abundant resources and excellent connectivity as an entry point, skilled workforce, strong labour market, multilingual society and an established halal industry.
He said Malaysia’s position as a halal gateway is valuable for Japanese companies aiming to expand in the South-East Asian and Middle-East markets.
