Mergers and Acquisitions in India - Tapping into Indo-Japanese Opportunities

Oct 21, 2020

Start Date : Wednesday, Oct 21, 2020

End Date : Wednesday, Oct 21, 2020

Time (IST) : 12:00 PM - 01:00 PM

Time (UTC) : 12:30 AM - 01:30 AM

Services Offered : Strategic Initiatives, Entity Set-up & Management,

Speaker(s) : Tokio Nishibashi, Tomoya Okada, Tanwir A. Shirolkar

In this webinar, we explore the best practices for increasing the probability of success of M&A in India, investment trends for Japanese companies, and the impact of the pandemic on deal-making.

Indo-Japanese Investment trends


  • FDI shows a growing trend with USD 470 billion invested due to increasing ease of doing business
  • Japan is the 4th largest investor with USD 33 billion invested across automobiles, drugs, and pharmaceuticals
  • In the last 5 years, there have been approximately around 90 inbound M&A deals valued at around USD 10 billion. Out of this, only 15% of the acquisition deals involved more than 75% stake which means the Japanese prefer Indian promotors in the business
  • Larger volume transactions around IT due to investors’ interest in India’s talent and technology acumen. Investments in the consumer sector include in automobiles and equipment to enhance their product portfolio


  • Approximately 50 MoUs signed over 4 years across healthcare, agriculture, defense, infrastructure, etc
  • Japanese government allocated USD 221 million to incentivize companies to disperse manufacturing across the ASEAN region
  • 12 chosen Japanese Industrial Townships (JITs)sites to develop integrated industrial parks with world-class infrastructure for operations and plug-n-play factories.
  • Designing system for manufacturing, R&D in the field of AI under Indo-Japan Digital Partnership and training under Japan-India Institute of Manufacturing
  • India-Japan Startup Initiatives: with India being 3rd largest ecosystem of 40,000 active startups, Japan is the 4th largest PE/VC investor with Softbank itself having invested around USD 10 billion

COVID-19 impact and emerging opportunities


  • Disruption in businesses and their revenue streams across sectors that range from short (telecom, IT) to long term (aviation, tourism) impact
  • Changes in consumer preferences - being cautious about spending
  • Disruption in logistics and supply chain of raw materials
  • Companies are in cash conservation mode and some have shut down
  • Investors and skeptical and more vigilant before investing


  • India has the potential to become a global manufacturing hub due to the government’s efforts
  • India’s attractiveness for investment lies in its untapped potential of the large consumer market
  • Japanese markets have been tapping African markets from operations in India. Post covid era provides opportunities to scale and decentralize their supply chain
  • Stressed and non-core asset sales
  • Funds infusion in e-health, edutech, banking, insurance, etc.

Valuation and due diligence:

“Clarity regarding ownership and transferring of Intellectual Property developed by JVs should be taken into consideration”
- Tanwir Shirolkar

  • Understanding the scope of transactions - why is the company entering India and, what products and markets it plans to enter, and how
  • The Joint venture partners should be very clear in terms of monetary and non-monetary contributions across IP, customers, assets, etc.
  • The desired shareholding will depend on the contributions made and desired control
  • Evaluate business plan - understanding temporary and permanent costs, future cash flows, working capital requirements, etc
  • Due diligence across taxes, financial statements, IT, environmental, etc.
  • Access to confidential rules and policies to the due diligence team

Addressing commercial exposure

From negotiated value to final agreed pricing, consider the following factors:

  • Purchase price adjustments: based on the quality of earnings, working capital, and debt
  • Payment mechanism: could be earn-out, deferred payment, salaries, or royalties
  • Provisions in definitive agreement: could use ESCROW mechanism, warranties, etc

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