Half of Japanese firms Considering Restructuring to Boost Corporate Value

A Reuters survey found that roughly half of Japanese firms are considering reviewing or restructuring their businesses to increase corporate value, including acquisitions, amid a push for companies to improve governance. The survey results are the latest indication of concrete steps that companies in the world's third-largest economy are planning to take to transform their operations and increase corporate value.

The Tokyo market has hit its highest in three decades on expectations companies will boost shareholder returns through unwinding of crossholdings, share buybacks and other measures. With nearly half of listed companies trading below book value, the Tokyo Stock Exchange is putting pressure on firms to review their use of capital, on Monday publishing a list of those with plans to put pressure on laggards.

While the TSE lists companies that have compiled or considering action plans, the Reuters survey shows measures being considered. Among 104 companies polled, just under a third said they were looking at combining their core businesses with other companies through mergers and acquisitions (M&A), with around a quarter looking at the sale of non-core businesses.

One respondent from the wholesale sector said its company was looking at combining with downstream players to drive restructuring. Another said it was looking "to expand corporate scale through proactive M&A".