Acquisition costs: a qualitative study on Japanese cross-border acquirers

This exploratory qualitative study develops a comprehensive framework that identifies the factors that, according to M&A deal advisors, influence acquisition costs borne by Japanese firms in cross-border acquisitions of Western target companies. Our findings suggest that, first, Japanese firms tend to pay higher acquisition premiums as a result of steadfastness, uncertainty avoidance, and a shift from market entrance to technological acquisition motives. Second, Japan-specific buyer characteristics are associated with elevated advisory fees, largely driven by extended time commitments and substantial manpower involvement. Furthermore, limited English-language proficiency within acquiring deal teams appear to remain a significant challenge during negotiations, thereby contributing to higher advisory fees.