Japanese M&A in Australia: accelerating business transformation as the world hurtles towards an uncertain future
Ahead of the Deal - Australian M&A Briefing
Key insights
- Japanese inbound M&A in Australia remained strong in 2025: While there was a drop in the deal count (from 74 in 2024 to 63), the aggregate deal value was the highest in the last four years (at approximately ~A$14.6 billion).
- The top sectors were mining and resources and real estate: Technology, engineering and industrial services and automotive sectors also featured strongly.
- Eco system building is emerging as Japanese investments mature: Japanese investors continue to seek opportunities to grow their existing Australian businesses. Alongside bolt-ons, an emerging trend is acquisitions of adjacent businesses in the ecosystem or supply chain to maximise revenue opportunities and mitigate supply chain risks, as demonstrated by Sojitz's acquisitions in the infrastructure and construction sector and Nippon Life's buy-out of the interests in MLC Life Insurance and Resolution Life that it did not already hold.
- Demonstrating immediate profitability is essential: As Japanese corporate governance standards and shareholder expectations have risen, shorter term profitability has come into sharper focus.
- The Japan Inc joint venture model is alive and well: Traditionally popular in mining, this model is now being used across all sectors, unlocking capital for lead investors to deploy in further pipeline investments or development, facilitating market entry by new investors and allowing all parties to share risks. Japanese companies are increasingly co-investing with other Japanese partners – from Mitsui and Itochu's joint acquisition of a stake in the Minister's North iron ore deposit, to the involvement of multiple Japanese corporates across successive funding rounds in Australian technology innovators such as Applied EV and MCi Carbon.
"M&A continues to be attractive for Japanese investors because it enables far quicker business transformation than is possible through organic growth. This is critical in a world which is radically changing through AI much, much faster than anyone had anticipated. It is unsurprising amidst continuing geopolitical uncertainty that for Japan, Australia remains a favoured destination for investment."
We have gathered the data on Japanese inbound investment in Australia in 2025, and distilled the key trends and highlights that you need to know. We give our predictions on what we can expect to see in 2026.
Japanese inbound M&A in Australia remains strong
2025 was another strong year for Japanese inbound M&A in Australia, with Japanese investors announcing 63 acquisitions of Australian targets. This was a slight decrease on the 74 deals announced in 2024 (being the most active year by deal count post-COVID pandemic). Based on publicly-available data, however, 2025 recorded the highest aggregate annual inbound Japanese deal value for the post-pandemic period at approximately A$14.6 billion, compared to approximately A$11.2 billion in 2024.
Inbound M&A from Japan into Australia – number of deals and transaction value (2022–2025)
Target sectors remained diverse, with mining and resources and real estate at the top
Japanese investors have continued to make acquisitions across the breadth of the Australian economy. In 2025, real estate and mining and resources were the top sectors by deal count with technology, engineering and industrial services and automotive also featuring strongly.
Number of inbound Japanese M&A deals by target sector (2022–2025)
Japanese investment has matured and is focused on growth of existing business
While we continue to see strong interest from new entrants to the Australian market, Japanese investment in Australia is now at a level where many Japanese investors have existing business operations and project pipelines. Common strategies for growth have included bolt-on acquisitions of similar businesses (including those in other territories) and acquisitions of adjacent businesses in the relevant ecosystem or supply chain to deepen participation in value chains where investors already hold commercial, technological, or operational advantages.
Case study 1: Nippon Life scales up its Australian business and enters New Zealand through its acquisition of Resolution and remaining shares in MLC
Nippon Life has pursued a systematic “deepening and broadening” strategy. It originally acquired 80% of MLC Life Insurance in October 2016, with NAB retaining 20% and then in October 2025, Nippon Life acquired NAB’s remaining 20% (~A$500m), taking it to 100% ownership of MLC. In parallel, Nippon Life, already a 23% owner of Resolution Life, acquired the remaining ~77% for about US$8.2–8.4bn (valuing the group at ~US$10.6bn). Post close, Nippon Life formally brought MLC (renamed Nippon Life Insurance Australia and New Zealand) and Resolution Life Australasia under the non-operating holding company in the group. Together, the MLC buy out and Resolution Life acquisition position Nippon Life as a scaled, long term owner operator across open and closed life books in Australia, creating operating and capital management synergies across the combined business.
Case study 2: Sojitz Corporation acquisitions in infrastructure and construction sector
Sojitz Corporation's recent investments are the most notable example of Japanese investment in Australia’s infrastructure and construction sectors. In 2025, Sojitz acquired Capella Capital to secure upstream public-private partnership (PPP) origination and asset management capabilities, then added a 50% stake in UGL Transport to extend into delivery, operations and maintenance. It also expanded its building services platform by acquiring Ellis Air and later taking a 70% stake in Climatech, creating a national, mission critical heating, ventilation and air conditioning (HVAC) systems provider. The ecosystem was 'completed' with the purchase of a majority stake in Next Green Group, integrating HVAC, energy retail and behind the meter solutions. Together, these acquisitions have produced a vertically integrated, end to end services platform spanning infrastructure development, transport operations, specialist HVAC and distributed energy and positions Sojitz to participate across the full lifecycle of Australia’s major, high specification and energy intensive assets.
Even for Japanese investors entering new markets or sectors in Australia, acquisitions of strategic stakes in platforms are being favoured due to certainty of revenues and natural hedges in respect of value chain risks.
The return of joint ventures and Japan Inc. across all sectors
Japanese investment in Australia traditionally followed a joint venture model, with Japanese companies taking minority stakes in projects or companies operated by local partners. However, the push towards globalisation of Japanese companies over the past two decades saw an increasing trend of 100% or majority acquisitions of Australian targets, enabling Japanese companies to book profits from those businesses in their group financial results.
As Japanese corporate governance standards and shareholder expectations have risen, Japanese investors are facing increasingly challenging target internal rates of return (IRR) on their investments. The need to make capital go further to fund capital expenditure or enable new investments to be made in the pipeline is driving a trend back towards joint ventures and co-investments, in particular with other Japanese companies coming in to share both capital commitments and risks.
The prevalence and popularity of different risk-sharing structures varies across the key sectors for investment.
A) Minority investment plus offtake - Iron ore and critical minerals
Japanese investors continue to take minority equity positions in Australian iron ore and critical minerals projects, pairing their investment with long term offtake rights to secure stable, high quality supply. For example:
- Mitsui and Itochu’s joint acquisition of 15% of BHP’s Ministers North deposit and Mitsui’s staged acquisition of a 40% interest in the Rhodes Ridge iron ore project (completed through two separate purchases from VOC Group and AMB).
- Sumitomo Metal Mining’s 30% interest in Rio Tinto’s Winu copper gold project.
- JX Advanced Metals and Marubeni partnering with RZ Resources on the Copi mineral sands and rare earths project.
B) Acquisition by lead Japanese investor with subsequent sell downs to other Japanese investors to form Japan joint venture – Real estate
In real estate (especially build to rent (BTR) and prime commercial assets), we have seen Japanese lead sponsors acquire a controlling or anchor stake in the asset via a company or unit trust, and then later sell down the shares and/or units in the company, trustee and/or trust to other Japanese co investors. This allows the release of capital for further projects and facilitates access for new entrants to the Australian real estate market.
Case study: Sumitomo Forestry's BTR joint venture with Cedar Pacific
Sumitomo Forestry acquired a 45% interest in the 50 Quay Street BTR project in Brisbane alongside its joint venture partner (Cedar Pacific) through a unit trust, then sold down minority interests in the trust to Fuyo General Lease (Asia) and Kanden Realty. Cedar Pacific Group is providing development management and investment management services. A similar approach is being taken to its investments in other BTR projects in the pipeline for Sumitomo Forestry and Cedar Pacific.
Building relationships with trusted local real estate developers and asset managers has been one of the keys to success for Japanese investors in real estate transactions.
C) Minority investment plus strategic partnerships and collaborations – Technology
Japanese investors are increasingly pairing capital with strategic partnerships to provide their Australian technology investees with access to the Japanese market (and even other foreign markets) and in doing so, also addressing domestic Japanese needs.
Investments frequently embed distribution rights, collaboration and co development programs, and manufacturing/go-to-market (GTM) support alongside equity; for example:
- MegaChips’ lead investment in Morse Micro came with a multi year partnership to ramp production and sales of Wi Fi HaLow silicon;
- Japan Post Capital's investment in Applied EV included a strategic partnership to jointly build sustainable, next-generation mobility and logistics solutions;
- SoftBank Robotics’ stake in ICetana included distribution rights in Japan and a strategic partnership agreement (complementing ICetana's existing partnership with Macnica);
- Mitsubishi Electric Mobility followed its investment in Seeing Machines with a referral agreement via Mitsubishi Electric Automotive America to push its driver safety solution across the Americas; and
- Yamaha’s early investment in The Yield in 2020 matured into the creation of “Yamaha Agriculture” in 2025 (and an acquisition of The Yield), ultimately integrating Australian microclimate analytics with robotics into a new global business line.
Additionally, the clustering ("katamari") effect of Japanese investment into Australian technology is increasingly shaping Australia’s tech landscape, where early Japanese investment has attracted multiple Japanese corporates across successive rounds. Examples include Applied EV, which moved from early backing by Suzuki Motor to a later strategic investment by Japan Post Capital; iCetana, which complemented its relationship with Macnica through a new stake and distribution agreement with SoftBank Robotics; and climate‑tech innovators MCi Carbon (backed initially by Mizuho Bank, ITOCHU, Sumitomo Mitsui Trust Bank, and later by Mitsubishi UBE Cement Corporation); AI Carbon (backed by Mitsubishi Corporation and then Osaka Gas); and Samsara Eco (backed by Kanematsu and Hitachi Ventures). This pattern underscores growing confidence and strategic alignment among Japanese investors.
What to expect in 2026
We continue to see healthy levels of inbound inquiries from Japanese companies, anchored by the longstanding relationship of trust between the two countries.
M&A (rather than new business establishment or greenfield projects) continues to be attractive for Japanese investors because it enables far quicker business transformation. This is critical in a world which is radically changing through the adoption of AI much, much faster than anyone had anticipated. It is unsurprising amidst continuing geopolitical uncertainty that for Japan, Australia remains a favoured destination for investment
It follows that the key sectors to watch for Japanese inbound M&A activity in Australia, including through joint venture opportunities, will be technology, energy transition related businesses/assets, infrastructure, real estate and mining and resources.
We expect the trend of consolidation and ecosystem building will continue, and the platforms that are acquired or created will be used to generate growth in Australia and potentially internationally.
While the flow of investment is still strongly skewed towards investment into Australia, it will be interesting to watch whether Australian companies will catch the current wave of foreign investment into Japan. Similar to the trend in Australian public markets, Japanese public companies are increasingly burdened by governance and compliance requirements, giving rise to a continuing stream of take-private opportunities.
Two way investment would further strengthen the relationship between Japan and Australia, allowing Australian businesses to contribute their capital and expertise to Japan, and build their capabilities in doing business with and in Japan.
Authors: Natsuko Ogawa, Partner; Shojeeb Alam, Senior Associate; Phoebe Phan, Associate; Janet Chhean, Associate
