According to a Dow Jones article from last week, the M&A landscape in Japan looks like it will be busy in 2007, likely driven by corporate Japan's need to restructure, its hunger for foreign acquisitions and a push by foreign firms to take advantage of opportunities in the world's second biggest economy.

Corporate Japan, with stronger balance sheets, flush with cash and in need of larger markets, is showing a renewed desire to venture overseas for acquisitions. Foreign private equity firms, which have cut few major deals in Japan despite blockbuster acquisitions in almost every other major market in the world, are also building up their presence in Japan.

Faced with such threats, many companies have been buying back shares, hiking dividends or trying to communicate more effectively with their shareholders in an effort to increase their market capitalization. According to ISS, others have been putting in place defense schemes, such as poison pills. 15 Japanese firms adopted poison pills in 2005, and the tally for 2006 is likely to top 140.

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