Taisei Corporation agreed to acquire Toyo Construction for approximately ¥160 billion ($1.1 billion), marking the largest takeover in Japanese construction industry history as the sector undergoes unprecedented consolidation.
The deal would combine the nation’s fifth-largest general contractor with a specialist in marine and civil engineering work. The combined entity would generate annual revenue of roughly ¥2.32 trillion ($15.7 billion), rivaling industry giant Obayashi Corporation.
Taisei disclosed the acquisition as it reported operating income surged 109% to ¥39.2 billion ($265 million) in the quarter ended June, driven by significant margin improvements across both civil engineering and building construction divisions. Net income climbed 26% to ¥29.5 billion ($200 million), representing the highest first-quarter profit in company history.
The timing appears strategic. Taisei’s new orders jumped 22% to ¥630.5 billion ($4.3 billion) during the quarter, bolstered by large-scale building projects in the Tokyo metropolitan area. However, net sales declined 4% to ¥440.3 billion ($3 billion) as several major domestic projects reached completion phases.
Toyo Construction brings specialized capabilities in port construction, reclamation work, and offshore infrastructure development. The Tokyo-based company employs approximately 1,925 people and generated trailing twelve-month revenue of $1.13 billion.
The acquisition reflects broader industry dynamics as Japan’s construction sector faces labor shortages and increased pressure from the Tokyo Stock Exchange to improve capital efficiency. M&A activity in Japan reached record levels in 2024 with 3,702 domestic deals, as companies seek scale and specialized capabilities.
The transaction requires regulatory approval and is expected to close later this year.
