Written by: Keegan Caldwell, Marcus Wolter, and Takahiro Miyazaki

Japan presents an attractive landscape for mergers and acquisitions (M&A) due to several compelling economic factors. The depreciation of the Japanese yen has made Japanese assets more affordable for foreign investors, thereby encouraging inbound M&A. The country’s robust GDP growth, coupled with a favorable interest rate environment paired with the Bank of Japan’s gradual policy normalization, enhances economic stability and investor confidence​.

Japan’s corporate governance reforms and the Tokyo Stock Exchange’s emphasis on improving capital efficiency are driving companies to optimize their portfolios, thereby creating more opportunities for strategic acquisitions and divestitures​​. Shareholder activism, a growing trend in Japan, is prompting companies to unlock hidden value and consider M&A as a strategic tool for growth and restructuring​​. Furthermore, Japan’s accumulated household savings and expected increase in consumer spending provide a positive outlook for domestic market growth, making it an attractive destination for foreign investors, despite demographic challenges​.

The current economic environment in Japan, characterized by low-interest rates and the depreciation of the yen, creates favorable conditions allowing buyers to optimize their capital structures and reduce the overall cost of acquisition​. Considering IP-backed lending must be part of that.

Japan has a well-established and reliable legal framework for intellectual property rights. The country’s strong enforcement mechanisms and adherence to international IP standards provide security and assurance to lenders that the IP assets used as collateral will be adequately protected and enforceable. Japanese companies often hold large amounts of patents, trademarks, and other IP assets that, if structured strategically, could significantly enhance their balance sheets and be used to secure financing​. Companies need to demonstrate how their IP assets create value for their businesses.

The revised Japanese Corporate Governance Code, effective from 2021, asks listed companies to disclose detailed information on the value of their IP-related investments, promoting greater transparency and encouraging strategic investments in intangible assets. Additionally, the government’s commitment to structural reforms, such as the planned 30% tax deduction on IP-related income starting in April 2025, further enhances Japan’s appeal to international investors​ and monetization of IP overall.

At Caldwell our IP and M&A specialists are facilitating tech-driven cross-border transactions for acquirers and sellers alike. We strongly believe that Japan is on the right track with its recent push trying to unlock the significant value that sits in Japanese Intellectual Property.

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