In a corner of Japan’s $400bn (¥60tn) construction industry, a 132-year-old Osaka-based company merged with a rival this month.
The $18mn (¥2.8bn) deal led by Imada Construction is small but emblematic of an increasingly acute crisis in the sector: it is erasing one player in a fragmented industry of about 470,000 companies struggling with either a leadership succession crisis or severe labour shortages. With Japan revising labour rules from next year to limit overtime for truck drivers, the race for construction workers is expected to intensify.
The transaction is also a sign of the changing dynamics of mergers and acquisitions in Japan where domestic deals are now easier as activists, private equity funds and even the government are openly pushing for companies to combine forces.