Japan Industrial Waste M&A: Landfill Acquisitions, Listed Consolidators and Foreign Entrants

(Updated October 2026. USD figures are converted at USD/JPY = 150 for reference. Company fiscal years are written as FY2026/3 for the year ended March 2026; government statistics follow Japan’s fiscal year from April to March.)

Industrial waste generation in Japan continues to decline gradually. Japan industrial waste M&A over the past few years has included acquisitions of owner-run regional operators by listed waste management companies, in particular companies that own final disposal sites (landfills), as well as transfers of waste businesses from large corporate groups and the entry of foreign capital. In 2025, Daiei Kankyo acquired 80% of Scarabe Sacre, the operator of a large controlled landfill in Kitakyushu, together with two companies holding Scarabe Sacre shares, for ¥44.0bn (~USD 293mn), and Veolia’s Japanese subsidiary acquired a landfill company in Yamagata Prefecture from the ORIX group. A large Japanese group has also combined its waste business with a platform formed from companies held by private equity funds.

This article is written for corporate development and international business development teams at foreign companies that see Japan as an acquisition market, a source of partners, or a source of acquirers for their own businesses. It reviews Japan industrial waste M&A through the market structure, the industry landscape, domestic consolidation, foreign capital in Japanese waste management, Japanese companies’ acquisitions abroad, the industry-specific factors acquirers examine, and the implications for overseas acquirers.

1. Market Structure — Declining Waste Volumes and Limited Landfill Capacity

Waste generation and treatment

According to Japan’s Ministry of the Environment (MOE), industrial waste generation in FY2023 (April 2023 to March 2024) was about 367.25 million metric tons, down about 1.8% from the prior year. Of this total, 54.7% was recycled, 42.9% was reduced through intermediate treatment, and about 8.75 million tons (2.4%) went to final disposal in landfills (MOE, Industrial Waste Generation and Treatment, FY2023). Final disposal volume fell by about 3.0% year on year. Three sectors, electricity, gas, heat and water supply (26.5%), agriculture and forestry (22.0%), and construction (21.8%), account for about 70% of generation.

As of April 1, 2024, there were 248,458 industrial waste management licenses in Japan, excluding licenses for specially controlled industrial waste (MOE, Status of Industrial Waste Treatment Facilities and Licenses). Licenses are issued by each prefecture and designated city, and one operator can hold several of them, so the license count does not equal the number of operators.

Daiei Kankyo, one of the listed operators, estimates the industrial waste treatment market at about ¥3.0tn (~USD 20bn) on an FY2024/3 basis. Its estimate of the broader waste-related market, including municipal waste treatment and recycling, is about ¥9.3tn (~USD 62bn). Daiei Kankyo calculates that the combined revenue of the four largest companies (DOWA Holdings, TRE Holdings, Daiei Kankyo and Daiseki), ¥446.3bn (~USD 2.98bn), equals 4.8% of that broader estimate. Even together, the largest companies account for less than 5% of the estimated market, although Daiei Kankyo notes that the revenue and market figures cover different periods and that the ratio does not represent actual market share.

Process segments

Each stage of industrial waste management requires different licenses, facilities and customer relationships. In M&A, the stages in which a company holds licenses and facilities shape both the set of likely acquirers and the way they assess the business.

Segment	Main activities	Business characteristics
Collection and transport	Collecting waste from generators and transporting it	235,225 licenses, the large majority of all waste management licenses. Trucks, drivers and contracts with waste generators form the business base
Intermediate treatment	Crushing and sorting, incineration, dewatering and other volume reduction and recycling processes	12,461 of the 13,233 disposal licenses cover intermediate treatment only. 19,565 intermediate treatment facilities, including 2,890 incinerators. Each facility requires its own installation permit
Final disposal	Landfill disposal	269 licenses cover final disposal only and 503 cover both intermediate treatment and final disposal. 1,551 landfills (915 stable-type, 613 controlled-type and 23 isolated-type). New sites require land and permitting
Recycling	Producing and selling recycled materials and fuels	Conducted under disposal (intermediate treatment) licenses; no separate license category. 54.7% of generated waste is recycled. Product quality and offtake channels drive earnings

License and facility counts are MOE figures as of April 1, 2024.

Five drivers of consolidation

Declining volumes and limited landfill capacity — While waste generation declines gradually, the number of industrial waste landfills was 1,551, unchanged from the prior year. Remaining capacity is about 177.41 million cubic meters, and the remaining life is 20.3 years (as of April 1, 2024, per the MOE data above); MOE calculates remaining life by dividing remaining capacity by annual final disposal volume. With volumes not growing, acquiring companies with existing landfills and treatment facilities is one way for operators to increase intake. In Case 1 in Section 3, the acquirer cited the increase in remaining capacity, and in the Enoken Kogyo acquisition in Case 3, the potential for a new landfill.
A new framework for resource circulation — The Act on the Promotion of Resource Circulation through Advanced Recycling Businesses, promulgated in May 2024, came into full effect in November 2025 (MOE, Overview of the Act). Recycling businesses certified by the national government receive exemptions from certain licenses under the Waste Management Act, and disposal operators that processed 10,000 tons or more of industrial waste in the prior year (1,500 tons or more for waste plastics) must report their disposal and recycling volumes. Certification and reporting require recycling facilities and management systems, which bear on whether an operator responds on its own or within a larger group.
Labor shortages — In an MOE survey of 351 waste management companies conducted in February 2021, 65% reported a shortage of personnel, and 58% reported a shortage in field operations, including collection and transport. Half said the share of employees aged 65 or older had increased over the previous five years, and 46% employed workers aged 70 or older (MOE, FY2020 Survey on Securing Diverse Human Resources in the Industrial Waste Management Industry). Since April 2024, overtime for truck drivers has been capped at 960 hours a year (Ministry of Health, Labour and Welfare, Truck Driver Working Hours Portal). Staffing for collection and treatment is one of the factors owners weigh in deciding whether to remain independent or join a group that can share personnel and vehicles.
More acquisitions by listed operators — In May 2026, Daiei Kankyo revised the capital allocation of its medium-term plan (FY2026/3–FY2028/3), raising its M&A budget from ¥10bn-plus to ¥55bn-plus (~USD 367mn). Of its 47 consolidated subsidiaries, 31 were acquired through M&A (as of May 2026), and it completed six M&A transactions in FY2026/3. TRE Holdings added four new consolidated subsidiaries in FY2026/3, and Midac Holdings acquired landfill companies in April 2025 and April 2026 (Section 3).
Business succession — Japan’s Small and Medium Enterprise Agency had estimated that by 2025 about 2.45 million owners of small and medium-sized enterprises would be over 70, and that about half of them (1.27 million) would have no designated successor (SME Agency, Current Analysis of Business Succession and M&A). The average age of company presidents in Japan was 60.7 in 2024 (2025 White Paper on Small and Medium Enterprises). Daiei Kankyo notes that many industrial waste operators were founded in the 1970s and 1980s and that many lack successors. Takeei and River Holdings also cited the large number of small operators and succession issues as industry challenges when they announced their business integration.

2. Industry Landscape

Listed waste management companies

Company	Headquarters	Consolidated revenue	Main fields and recent moves
TRE Holdings	Tokyo	¥119.2bn (~USD 795mn), FY2026/3	Formed in 2021 through the business integration of Takeei and River Holdings. Construction waste treatment and metal recycling. Acquired E&M in 2025
Daiei Kankyo	Kobe (registered office: Izumi, Osaka)	¥87.9bn (~USD 586mn), FY2026/3	Integrated services from collection to intermediate treatment and final disposal. Acquired Scarabe Sacre and took an equity-method stake in Yokoukogyo in 2025
Daiseki	Nagoya	¥71.8bn (~USD 479mn), FY2026/2	Intermediate treatment and recycling of industrial waste. Took its listed subsidiary Daiseki Eco. Solution private through a tender offer in 2025
Yokoukogyo	Toshima-ku, Tokyo	¥14.9bn (~USD 99mn), FY2026/3	Collection, transport and disposal, recycling, and services contracted by municipalities
Midac Holdings	Hamamatsu, Shizuoka	¥11.8bn (~USD 79mn), FY2026/3	Built around controlled-type and stable-type landfills. Acquired Ohira Kosan in 2025 and Enoken Kogyo in 2026

DOWA Holdings, a major non-ferrous metals company, also runs an environmental management and recycling segment, with waste treatment operations in Japan and Southeast Asia (Section 5).

Daiseki’s buyout of its listed subsidiary Daiseki Eco. Solution is an intra-group reorganization and is not counted among the cases in Section 3.

Waste businesses within large corporate groups

Large Japanese groups whose core business is not waste management have also owned waste companies. The ORIX group owned Zeeklite, a landfill operator in Yamagata Prefecture, and Asahi Holdings (now ARE Holdings, whose core business is precious metals recycling) ran industrial waste collection and intermediate treatment through Japan Waste and other subsidiaries. Between 2022 and 2025, these businesses moved to a waste management company, a fund-backed waste platform and a foreign environmental services major (Sections 3 and 4).

Owner-run operators

In the cases in this article, owner-held companies such as Scarabe Sacre (whose shares were held by Tadaharu Yanai, Hitomi Yanai and their companies) and E&M (whose president held all of the shares) were the targets. Non-listed waste companies disclose little, and their licenses and remaining landfill capacity have to be confirmed through municipal license records and direct contact with the company.

Concentration in Kansai

Of the companies covered in this article, Daiei Kankyo (registered office in Izumi, Osaka; head office functions in Kobe) and Japan Waste (Kobe) are based in the Kansai region. Acquisitions of Kansai companies include Daiei Kankyo’s acquisitions of Kyoto Eco Service (Kyoto; collection, transport and recycling; formerly Wood Life Company) in May 2025 and Koki (Nishinomiya, Hyogo; plant construction and maintenance) in January 2026, and Daiseki Eco. Solution’s acquisition of Sugimoto Shoji (Hikone, Shiga; collection, transport and intermediate treatment) in April 2023.

3. Domestic Consolidation — Landfill Acquisitions, Integration and Transfers From Large Groups

Case 1: Daiei Kankyo and Scarabe Sacre (2025) — A large controlled landfill held by an owner-run company

In August 2025, Daiei Kankyo announced the acquisition of 80% of the voting rights in Scarabe Sacre (Moji-ku, Kitakyushu), together with all shares of two companies holding Scarabe Sacre shares, and completed it in November 2025. Scarabe Sacre, established in 1994, operates controlled landfills for industrial waste and contaminated soil, with a combined permitted capacity of about 8.81 million cubic meters across its third- and fourth-phase sites. The price was ¥44.0bn (~USD 293mn), including the shares of the two holding companies, and was set through negotiation based on a third-party valuation. Scarabe Sacre’s revenue for FY2025/3 was ¥6.06bn (~USD 40mn), with operating profit of ¥4.50bn (~USD 30mn).

Daiei Kankyo cited three reasons: the site has a dedicated berth and can receive waste by sea from a wide area; it contributes substantially to the growth measures in its medium-term plan to increase annual landfill volume and remaining capacity; and, combined with an energy recovery facility being developed in Kyushu by a company Daiei Kankyo co-owns, it allows a waste treatment system completed within the region. As of March 2026, the fourth-phase site (about 4.95 million cubic meters) had not yet been used.

This transaction shows that (i) a listed waste operator acquired a large controlled landfill held by an owner-run company at a price in the tens of billions of yen, and (ii) the acquirer valued not only remaining capacity but also the reach of seaborne intake and the combination with its own regional facilities.

Case 2: Takeei (TRE Holdings) and E&M (2025) — A regional operator as an additional base

In June 2025, Takeei, a subsidiary of TRE Holdings, signed an agreement to acquire 90% of E&M (Sapporo) from its president, who held all of the shares, and completed the acquisition in July. E&M, established in 1995, provides waste collection and transport, disposal and recycling, and reported revenue of ¥1.70bn (~USD 11mn) and operating profit of ¥89mn (~USD 0.6mn) for FY2024/11. The price was not disclosed at the seller’s request; it was set mainly on the basis of net assets, with reference to a third-party valuation.

TRE Holdings cited the addition of a second base in Hokkaido and progress in diversification and public-private partnership initiatives.

This transaction shows that (i) a listed operator added a second base in Hokkaido, where it already operated, by acquiring an owner-run company covering collection through treatment, (ii) the owner sold the large majority of the shares while retaining part, and (iii) the acquirer disclosed net assets as the main basis for the price.

Case 3: Midac Holdings, Ohira Kosan (2025) and Enoken Kogyo (2026) — Serial acquisitions of landfill companies

In April 2025, Midac Holdings, headquartered in Hamamatsu, acquired all shares of Ohira Kosan (Chiyoda-ku, Tokyo), which provides final disposal and collection of industrial and municipal waste. Ohira Kosan operates the Otsukayama Clean Center, a controlled landfill in the Kanto region, and in June 2026, about a year after the acquisition, Midac announced a plan to expand its capacity from about 3.03 million to about 4.33 million cubic meters.

In April 2026, Midac also acquired all shares of Enoken Kogyo, which has operated a stable-type landfill in Makinohara, Shizuoka. Midac cited the potential to build a new stable-type landfill over the medium to long term and the opportunity to increase its share of stable-type disposal in Shizuoka, and described the deal as part of what it calls “supportive M&A.” In 2021, it also acquired Yanagi Sangyo, an industrial waste disposal and collection company in Hamamatsu.

These transactions show that (i) a listed company built around landfills has acquired landfill companies both in its home prefecture of Shizuoka and in Kanto, and (ii) the acquirer has planned a capacity expansion at an acquired landfill after the acquisition.

Case 4: Takeei and River Holdings (2021) — A business integration of two listed companies

Takeei, focused on construction waste treatment, and River Holdings, a metal recycler, established TRE Holdings as a joint holding company through a joint share transfer in October 2021. The share transfer ratio was 1.24 TRE shares per Takeei share and 1 TRE share per River Holdings share. In their latest fiscal years at the time of the announcement in May 2021, Takeei reported consolidated revenue of ¥42.1bn (~USD 281mn; FY2021/3) and River Holdings ¥28.4bn (~USD 189mn; FY2020/6).

The companies cited as expected integration benefits revenue growth through cross-selling, optimization of facilities, sites and logistics, cost reductions from converting waste into recycled raw materials and fuels such as refuse paper and plastic fuel (RPF), and expansion of woody biomass and waste-to-energy power generation. TRE Holdings reported consolidated revenue of ¥119.2bn (~USD 795mn) for FY2026/3.

This transaction shows that (i) two listed companies handling different waste streams integrated through a joint holding company, and (ii) the expected benefits were cross-selling, optimization of facilities and logistics, and conversion of waste into recycled raw materials and fuels.

Case 5: ARE Holdings (formerly Asahi Holdings), Takeei and Renatus (2022 and 2024) — Transfer of a large group’s waste businesses and a fund-backed platform

In May 2022, Asahi Holdings, whose core business is precious metals recycling, sold all shares of JW Glass Recycling (Koto-ku, Tokyo; revenue of ¥1.19bn (~USD 8mn) for FY2021/3), a glass waste recycler, to Takeei. Asahi Holdings cited synergies with the TRE group’s glass recycling from solar panels and end-of-life vehicles, and the optimal allocation of management resources across its group.

In March 2024, the company, renamed ARE Holdings, made Japan Waste (Kobe; established in 1964), its industrial waste collection and intermediate treatment subsidiary, a wholly owned subsidiary of Renatus through a share exchange. Renatus was established in August 2023 to combine four companies held by funds advised by J-STAR, a Japanese private equity firm: Sincere Holdings, Shin Nihon Kaihatsu Holdings, Sanwa Group and Harita Metal. After the exchange, ARE Holdings holds 32% of the voting rights in Renatus through a subsidiary and accounts for it by the equity method. The parties cited the combination of Japan Waste’s nationwide network with Renatus’s large treatment facilities in the Tokyo metropolitan area, Chubu, Kinki and Hokuriku, and one-stop services for large waste generators. At the time of the announcement, Renatus stated that it aimed to go public.

These transactions show that (i) a group whose core business is precious metals recycling transferred its industrial waste businesses to outside owners by waste stream and by company, (ii) a company formed to combine several waste companies held by private equity funds took over a large group’s waste business, and (iii) the seller did not exit fully but remained a minority shareholder in the combined company through a share exchange.

Case 6: Daiei Kankyo and Yokoukogyo (2025) — A minority stake in a listed waste operator

In October 2025, Daiei Kankyo acquired from a Cayman Islands fund its entire holding in Yokoukogyo (Toshima-ku, Tokyo), a company listed on the Standard Market of the Tokyo Stock Exchange, representing 17.88% of the voting rights. For most of the shares, the fund contributed its Yokoukogyo shares to Daiei Kankyo in exchange for newly allotted Daiei Kankyo shares, with Yokoukogyo shares valued at ¥1,900 per share. Daiei Kankyo cited Yokoukogyo’s strong relationships with municipalities, centered on Tokyo; the two companies signed a comprehensive business alliance agreement, and Daiei Kankyo accounts for Yokoukogyo as an equity-method affiliate. Daiei Kankyo describes the Kanto region as the largest market and has stated that it will focus particularly on that region. Yokoukogyo’s revenue for FY2026/3 was ¥14.9bn (~USD 99mn), of which about ¥3.4bn (~USD 23mn) came from services contracted by municipalities.

This transaction shows that (i) Daiei Kankyo built relationships in the Kanto region, which it describes as the largest market, through a minority stake combined with a business alliance rather than a full acquisition, (ii) the acquirer valued relationships with municipalities, and (iii) the acquirer’s own shares were used as consideration.

Case 7: TOKAI Holdings and Wood Recycle (2022) — An adjacent-industry acquirer

In June 2022, TOKAI, a subsidiary of TOKAI Holdings, an energy and telecommunications group, acquired shares of Wood Recycle under a share purchase agreement signed in May, making it a subsidiary. Wood Recycle (Gero, Gifu; established in 1996) produces wood chips and provides intermediate treatment of wood waste. TOKAI Holdings cited Wood Recycle’s role as an essential outlet for local construction companies’ waste wood, strong demand for wood chips as fuel for woody biomass power generation, and the stability and production growth that group resources could provide. It also stated that it would consider power generation using wood chips.

This transaction shows that (i) the acquirer of a waste treatment company was an energy group rather than a waste operator, and (ii) the acquirer valued intake from local construction companies and the fuel outlet for the recycled product.

4. Foreign Capital in Japanese Waste Management — Out-In Transactions

Case 8: Veolia and Zeeklite (2025) — A foreign environmental services major acquires a landfill company

In June 2025, Veolia Japan, the Japanese subsidiary of France’s Veolia, completed the acquisition of all shares of Zeeklite (Yonezawa, Yamagata) from ORIX Environmental Resources Management, an ORIX group company. Zeeklite has operated a controlled landfill since 1998 that accepts industrial waste, specially controlled industrial waste, municipal waste and contaminated soil, and also mines and sells zeolite. ORIX announced the transfer on May 30, 2025, and Veolia announced completion on June 26, 2025. The price was not disclosed.

Veolia stated that the acquisition enables end-to-end industrial waste management, from collection to final disposal, to meet growing needs in Japan’s industrial sector, and linked it to hazardous waste treatment, one of the growth areas in its GreenUp strategic program. ORIX stated that combining Zeeklite’s operations with Veolia’s expertise would support Zeeklite’s growth and its long-term value, and that the sale fit its own focus on circular economy and resource recovery.

This transaction shows that (i) a foreign environmental services major acquired a landfill company from a Japanese financial services group, and (ii) the acquirer cited the ability to offer integrated services in Japan from collection to final disposal.

Case 9: Veolia’s earlier steps in Japan (2014 and 2016) — From a minority stake and joint ventures to acquisitions

Veolia Japan was established in 2002 and operates in water, waste management and energy. Its waste business in Japan was built in stages. In December 2014, Veolia Water Japan subscribed for 478,000 new shares of Takeei at ¥962 per share (about ¥460mn, ~USD 3mn), a 2.00% stake, and the two companies formed two joint ventures for woody biomass power: a holding company owned 70% by Takeei and 30% by Veolia, and an operation and maintenance company owned 70% by Veolia and 30% by Takeei. The companies also agreed to discuss joint development of resource, energy and waste businesses in Japan and overseas.

In September 2016, Veolia Japan acquired all shares of three plastics recycling companies from Renova, a renewable energy developer: Ecos Factory (Honjo, Saitama), Green Loop (Kikugawa, Shizuoka) and Nissen (Joso, Ibaraki), with combined revenue of about ¥3.7bn (~USD 25mn) for FY2016/3. Renova sold the companies to concentrate its resources on renewable energy.

Cases 8 and 9 show that (i) a foreign major entered Japanese waste management through a minority stake and joint ventures with a listed operator before acquiring companies outright, and (ii) its acquisitions were purchases from Japanese corporate sellers, a renewable energy developer in 2016 and a financial services group in 2025.

Case 10: ERI and ITOCHU (2026) and J-Cycle (2024) — Joint ventures in IT equipment and battery recycling

In March 2026, ITOCHU announced that its wholly owned subsidiary Belong, which runs a secondhand mobile device business, and Electronic Recyclers International (ERI), a US electronics recycler, would establish ERI Japan, a joint venture to recycle IT equipment, including mobile devices, in Japan. ITOCHU also planned to acquire a partial stake in ERI. ITOCHU cited the growth of the IT asset disposition market and the Act on the Promotion of Resource Circulation through Advanced Recycling Businesses, and stated that the partners would combine ERI’s US recycling technologies with the ITOCHU group’s networks in Japan and overseas. The ownership split was not disclosed.

In battery recycling, Miracle Eternal of Singapore took a 27% stake in J-Cycle, a lithium-ion battery recycling joint venture announced in May 2024, alongside Japan’s VOLTA (51%) and Mitsui & Co. (22%). J-Cycle produces black mass, an intermediate battery material, at a plant in Ibaraki Prefecture.

These transactions involve IT equipment and battery recycling, adjacent to industrial waste management. In these two cases, (i) foreign recyclers entered Japan through joint ventures with Japanese trading companies or recyclers rather than acquisitions, and (ii) in the ERI case, ITOCHU contributes sourcing networks for end-of-life products, while ERI contributes recycling technology.

5. Japanese Companies Abroad in Waste and Recycling — In-Out Transactions

For overseas companies, Japanese groups are potential acquirers of their businesses and potential partners. Their transactions indicate the targets and purposes of Japanese investment abroad in waste management and recycling. Within the scope of our research, we did not identify overseas acquisitions by Daiei Kankyo, TRE Holdings or Midac Holdings. The overseas acquisitions and investments below were made by Japanese companies in non-ferrous metals, plant engineering, trading and precious metals recycling.

Case 11: DOWA Holdings and Modern Asia Environmental Holdings (2009) — A portfolio of Southeast Asian industrial waste companies

In February 2009, DOWA Holdings acquired Modern Asia Environmental Holdings (MAEH), a holding company of waste treatment businesses in Southeast Asia. DOWA’s annual securities report lists under MAEH Eastern Seaboard Environmental Complex (Chonburi, Thailand), Bangpoo Environmental Complex (Samut Prakan, Thailand), Technochem Environmental Complex (Singapore) and Prasadha Pamunah Limbah Industri (Indonesia; 95% of voting rights). These companies provide incineration, final disposal and wastewater treatment, and the Thai and Indonesian sites are located near industrial estates.

In 2016, DOWA Eco-System, a DOWA Holdings subsidiary, also acquired 49% of PDI Tak Eco, a waste treatment subsidiary of Thailand’s Padaeng Industry. It cited the rapid growth of industrial waste in Thailand, the shortage of treatment facilities, and its aim to grow its environmental management and recycling business across Asia.

These transactions show that (i) a Japanese non-ferrous metals major acquired, in one transaction, a group of companies with incineration and landfill facilities in Thailand, Indonesia and Singapore, and (ii) it has continued to invest in countries short of treatment capacity, including through a joint venture with a strong local company.

Case 12: Kanadevia Inova and Babcock & Wilcox Renewable Service (2024) — Waste-to-energy aftermarket services in Europe

In July 2024, Inova, the Swiss subsidiary of Kanadevia (renamed from Hitachi Zosen in October 2024), acquired Babcock & Wilcox Renewable Service of Denmark, which provides aftermarket services for waste-to-energy and biomass combined heat and power plants and has more than 160 employees. Inova cited the more than 140 waste-to-energy plants operating in the Nordic countries, many of them aging, and the expected growth in aftermarket demand, as well as its aim to expand its full plant lifecycle business for both its own plants and those of other companies. In May 2025, Kanadevia Inova also acquired assets, including grate technology and licenses, from Babcock & Wilcox A/S. Prices were not disclosed.

This transaction shows that (i) a Japanese plant engineering group, through its overseas subsidiary, acquired waste-to-energy aftermarket services and combustion technology in stages, and (ii) the purpose was demand for maintenance and upgrades of operating plants rather than new-build orders.

Case 13: Mitsui & Co. and MTC Business (2024) — A stake in an Indian metal scrap company

In June 2024, Mitsui & Co. announced an investment in MTC Business (Mumbai; established in 1974; about 2,000 employees), a metal recycler with more than 30 scrap sorting and processing yards across India. At the announcement, Mitsui stated that MTC would become its equity-method affiliate once the investment was completed. Mitsui cited growing steel demand in India and the medium- to long-term growth in demand for metal scrap as a recycled raw material that helps decarbonize steelmaking, and stated that MTC planned to enter end-of-life vehicle recycling in earnest. The stake and amount were not disclosed.

This transaction shows that (i) a Japanese trading company invested in a local company with a collection network for recyclable materials in a growing market, and (ii) the purpose was building a supply chain for recycled raw materials rather than waste treatment itself.

Case 14: Asahi Holdings and Johnson Matthey’s gold and silver refining business (2015) — A disclosed price for an overseas refining business

In December 2014, Asahi Holdings agreed to acquire all shares of the holding company of Johnson Matthey’s gold and silver refining business in North America, and completed the acquisition in March 2015. The price was USD 186mn (about ¥22.3bn at the time). For FY2014/3, the target business reported revenue of USD 70.6mn, operating profit of USD 12.8mn and net assets of USD 74.2mn. Asahi Holdings cited expansion of its regions and business scope in the Americas, the combination of the two groups’ procurement and sales networks and technologies, and the complementarity between its precious metals recycling from electronics, dental and jewelry materials and the target’s refining of mined material.

This transaction shows that (i) a Japanese company focused on precious metals recycling, which also ran industrial waste management in Japan, expanded its regions and business scope abroad by acquiring a refining business, and (ii) the price and the target’s financials were disclosed.

6. Industry-Specific Factors Examined by Acquirers

In acquisitions of Japanese waste management companies, acquirers examine industry-specific factors in addition to financials. Based on the reasons and synergies disclosed by the acquirers in the cases above, these factors fall into three groups: licenses and facilities, waste intake, and recycling outlets.

Licenses and facilities — The waste types and regions covered by collection, transport and disposal licenses, installation permits for treatment facilities, and, for landfills, permitted capacity, remaining capacity and room for expansion. In Case 1, the contribution to annual landfill volume and remaining capacity was among the reasons for the acquisition; in the Enoken Kogyo acquisition in Case 3, it was the potential for a new landfill. Under the Waste Management Act, waste management business licenses do not transfer through a business transfer, merger or corporate split, and the successor must obtain new licenses (MOE notice of March 30, 2020). Installation permits for treatment facilities, by contrast, can be succeeded through a transfer, merger or split with the approval of the prefectural governor. In a share acquisition, the licensed legal entity remains in place. Cases 1 to 8 were all carried out through share acquisitions, share exchanges or share transfers. Because licenses can be revoked if an officer of the licensed company falls under the grounds for disqualification in the Waste Management Act, the post-acquisition board composition is also examined.
Waste intake — Relationships with waste generators and municipalities, collection networks and the geographic reach of intake. Seaborne intake from a wide area in Case 1, relationships with municipalities centered on Tokyo in Case 6, and intake from local construction companies in Case 7 were part of the acquirers’ assessments.
Recycling outlets — The quality and sales channels of recycled materials and fuels, and the technology behind them. The expected integration benefits in Case 4 included conversion into recycled raw materials and fuels; the sale of JW Glass Recycling in Case 5 cited synergies with the acquirer’s glass recycling; and the acquirer in Case 7 cited demand for wood chips as fuel. In Cases 10 and 13, foreign recyclers and a Japanese trading company focused on securing recyclable materials and the outlets for them.

7. Implications for Overseas Acquirers

Target universe

The targets in the domestic and Out-In cases were owner-held, non-listed companies (Cases 1 and 2), other non-listed regional operators (Cases 3 and 7), waste businesses within large groups (Cases 5 and 8), and a listed operator (Case 6); Case 4 was an integration of two listed companies. The listed Japanese operators acquired landfills (Cases 1 and 3), an additional regional base (Case 2) and relationships in the Kanto region (Case 6). A foreign major acquired companies from Japanese corporate sellers (Cases 8 and 9). Information on licenses and remaining landfill capacity of non-listed companies is limited, so identifying targets requires research beyond public databases, and approaching them requires direct contact with owners and parent companies, in Japanese.

Transaction structures

The cases show several structures: full acquisitions (Cases 3 and 8, and JW Glass Recycling in Case 5), an 80% stake acquired together with two companies holding shares in the target (Case 1), acquisitions of a large majority with the owner retaining part (Case 2), a business integration of listed companies through a joint holding company (Case 4), a share exchange in which the seller remains a minority shareholder of the combined platform (Case 5), a minority stake combined with a business alliance (Case 6), a minority stake and joint ventures preceding acquisitions (Case 9), and joint ventures with Japanese partners (Case 10). Because waste management licenses do not transfer through business transfers, share acquisitions of the licensed entity are the basic structure. The appropriate structure depends on the intentions of the owner or parent company and on the acquirer’s integration plan.

What sellers emphasize

Corporate sellers explained their decisions in terms of their own portfolios and the fit with the acquirer. ORIX said Veolia’s expertise would support Zeeklite’s growth and long-term value (Case 8); Asahi Holdings cited synergies with the acquirer’s glass recycling and the allocation of its own resources (Case 5); and Renova described its sale as part of concentrating its resources on renewable energy (Case 9). Some sellers stayed invested: the owner in Case 2 retained part of the shares, and the seller in Case 5 remained a shareholder of the combined company. In our view, acquirers approaching Japanese sellers can expect to be asked how the business will grow under new ownership and, given the licensing rules above, how licenses, facilities and relationships with generators and municipalities will be maintained.

8. Syntax Partners

Syntax Partners is a Japan-based M&A advisory firm that acts solely as financial advisor. In any transaction, we advise one side only, either the buyer or the seller. We advise on Japan industrial waste M&A and resource circulation transactions in both domestic and cross-border settings.

Buy-side advisory

For foreign companies considering acquisitions or capital alliances in Japan, we support the full process: mapping targets based on their strategy, including non-listed owner-run companies and businesses within Japanese corporate groups; approaching owners and parent companies directly; negotiation; and execution. We work in Japanese and English, among other languages. In industrial waste management, licenses, facilities and remaining capacity are difficult to assess from public information alone. We work in Japanese and English, among other languages.

Sell-side advisory

As an advisor that maximizes the interests of sellers and owners, we support Japanese owners and parent companies considering a sale or business succession. The buyer universe we cover includes not only Japanese waste management companies but also adjacent-industry companies, funds and overseas strategic buyers. Our transaction support draws on our understanding of the industry, including license coverage by waste type and region, remaining landfill capacity, relationships with waste generators and municipalities, and outlets for recycled materials.

We welcome discussions at any stage, from early-stage exploration of acquisitions or partnerships in Japan to live transactions.

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This article was prepared by Syntax Partners, Inc. based on public information, including companies’ official announcements, IR materials and government statistics.

Syntax Partners, Inc.