M&A in the Management Growth of Rice-farming Corporations

Abstract

To develop rice-field agriculture, we believe it is important for advanced management to expand nationwide and promote large-scale operations, as well as to utilize their management know-how for sustainable management. For this purpose, M&A is considered to be one of the effective means. This study discusses the significance of M&A in the management growth of rice-farming corporations and the challenges it faces. We analyzed the efforts of Houmi Noukou, Inc., a company that has been expanding on a national scale since its establishment. In addition to its main base in Niigata Prefecture, the Houmi Group also operates an affiliate company, Adisuki, Inc. in Yamaguchi Prefecture. Additionally, Houmi Group has a capital and business alliance with Grain-farm. Co., Ltd in Fukushima Prefecture. We analyzed the background leading to investment in these two companies and subsequent progress. Houmi Group was found to have expanded its earnings from the business of collecting and selling rice through the establishment of subsidiaries and capital and business alliances. In each of these operations, Houmi Group has established a stable and efficient production system by utilizing the various know-how it acquired. The following are important in the preparation and execution phases of M&A: (1) establishing contacts with potential partners and support organizations, (2) conducting sufficient research on the partner’s assets and management capabilities, (3) coordinating with the local community, (4) clarifying contractual terms such as articles of incorporation, and (5) securing a certain level of management rights. In particular, coordination with the local community requires not only efforts on the part of the organization but also support from government agencies, and a mechanism must be created to promote M&A smoothly.