Q40Why have Japanese companies aggressively started to pursue M&As?

A40 It is because they have sufficient capital to invest in M&As, since one can now borrow money at extremely low cost due to the Bank of Japan's zero-interest-rate policy. Additionally, outstanding non-performing loans and other negative asset-related
Escalating mergers and acquisitions problems associated with the collapse of the Japanese economic bubble have almost all been sorted out. Japanese companies bought 315 overseas companies in 2005 for a total cost of 17.4 billion dollars. Among the transactions was the acquisition by Nippon Sheet Glass Co., Ltd. through a takeover bid of the major U.K.-based glass manufacturer Pilkington Group Limited. The acquisition, valued at 1.8 billion pounds sterling (approximately 358 billion yen), was completed in June 2006 with Pilkington becoming a subsidiary of Nippon Sheet Glass.

In February 2006, Toshiba Corp. agreed with British Nuclear Fuels (BNFL) to acquire the latter's subsidiary, the major nuclear power plant designer Westinghouse Electric Company for 5.4 billion dollars (approximately620 billion yen). It is predicted that the need to ensure the stable supply of electricity and reduce global warming will lead to the building of nuclear power stations, while demand for increased efficiency at existing nuclear power plants is expected to help expand the international nuclear energy market. Toshiba, which is paying particularly attention to the development of nuclear power in China and the rest of Asia, specializes in boiling water reactors (BWRs), while Westing-house has a strong track record in developing pressurized water reactors (PWRs). Through its U.K. acquisition, Toshiba will gain the capability to build both types of nuclear power stations, thereby expanding its potential business opportunities.