Empirical Study on Subsidiary Reacquisition Among Japanese Companies

This study presents an empirical analysis of the reasons Japanese companies are pursuing subsidiary reacquisition, with a particular focus on listed subsidiaries. Based on previous research on listed subsidiaries, we identified and empirically analyzed five hypotheses regarding the motivation for pursuing reacquisition: the information asymmetry hypothesis, restructuring hypothesis, low growth hypothesis, conflict-of-interest hypothesis, and hostile merger and acquisition (M&A) hypothesis. The results did not offer support for the information asymmetry hypothesis, low growth hypothesis, or hostile M&A hypothesis, but did in part support the restructuring hypothesis and low growth hypothesis. They also showed that the restructuring hypothesis is the only one of these five that accounts for the possibility of an increase in the share value of the parent company.