Negotiate, structure the transaction and close agreements
M&A Negotiations in Japan
M&A Negotiations in Japan: thorough preparations are essential. We have experienced many cases, where foreign negotiation teams are much less well prepared for negotiations with Japanese teams (and of course vice versa).
Expect the Japanese side to be excellently prepared. Depending on the case and stage of negotiations, legal department, intellectual property department, and several other specialists may join. Make sure you are prepared.
Timing: negotiations may stretch over considerable time periods. You need to keep reliable response rhythm. Note that excellent Japanese corporations measure “fast response” in terms of hours or days, not in weeks. “Rhythm” and “fast response” is culturally dependent. In some countries “fast response” can mean “in a week or two”, in Japanese top tier business usually it means today or tomorrow.
Cultural impact: we have seen many situations where one side assumed that the other side meant “no”, while we found this presumed “no” was quite straightforward to overcome
Body language, verbal and non-verbal clues, ways to say “yes, “no”, or “very difficult”, are very different in different cultures.
Structuring and closing the transaction
Crafting a suitable deal structure can make or break negotiations. In many cases the best structure for an acquisition in Japan is different than the optimum in other countries – its case by case.
“Yes” or a beautifully crafted and signed contract has little value without successful implementation
Keep in mind that your objective is not “agreement” or “yes” or signing a beautifully crafted contract, but your objective is to actually implement the business plan successfully, e.g. acquire a business, or form a joint-venture, and then manage the resulting business over the long term and make it grow.
Especially in Japan, a “yes”, an “agreement”, or a contract is only the beginning of a relationship or a business.
And, don’t forget, in Japan “hai” “はい' does not mean agreement, it only means that your Japanese partner has heard what you said.
We have at least 25 years experience negotiating in Japan, and our CEO, Gerhard Fasol, negotiates with Japanese business partners almost every day for 25 years, including several years of Board Director and Supervisory & Audit Committee work at a stock market listed Japanese corporation.
M&A and partnering in Japan topics
- M&A process
- Understand the industry: research
- Find and approach partners
- Build cooperation
- Due diligence
- Negotiate and close agreements
- Post merger
- Sale of a company by auction in Japan, or cross-border
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