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M&A bidding eligibility
Updated: July 2026, 8
(Updated: January 2021)
Today I'd like to talk about "M&A related to registration of bidding qualifications."
(For information on obtaining the necessary qualifications for bidding, please see our dedicated webpage.)
To participate in bids from local governments, you must apply for and obtain "bid participation qualification registration."
In addition, there are broadly three types of industries for registration of bid participation qualifications: , and some industries are affected by M&A and others are not. Furthermore, for items that involve permits and permits (especially construction), it is necessary to obtain permits again.
If you decide to proceed with an M&A, it is necessary to consult with the licensing authority in advance to minimize any gap in business operations and to prepare for the smooth running of the entire M&A process (M&A flow), from obtaining a license to the examination of the transfer of eligibility to participate in bidding. The required administrative procedures will vary depending on the characteristics of the M&A deal and the type of M&A method (M&A format), such as stock transfer, business transfer, or merger.
M&A transactions involving bidding tend to be fraught with various problems. Whether it's a one-on-one M&A transaction with a specific party, or a competitive M&A environment where multiple potential buyers are vying for the business, the smooth transfer of bidding qualifications directly impacts the business value.
We have summarized the advantages, disadvantages, and points to note from the seller's and buyer's perspectives.
M&A from the “seller side” perspective
●Benefits
・Funds can be raised by selling the business.
・In the case of business transfer, management resources can be concentrated on the business in which the company excels.
● Disadvantages
- When transferring a construction business, the transferor company may have to undergo a ``management matters examination (special economic examination)'' based on the date of reorganization.
- Resistance and friction due to differences in corporate culture may occur.
● Notes
- Set a minimum sales amount.
M&A from the “buyer side” perspective
●Benefits
・Industries that were previously unable to obtain bid participation qualification registration will now be able to do so, leading to business expansion.
● Disadvantages
・You will need to apply for succession again to register your bid participation qualifications.
・When taking over a construction business, it is necessary to re-obtain a construction business permit, and the transferee company may have to undergo a ``management matters review (special economic examination)'' based on the date of reorganization.
● Notes
・After reorganization, it is not possible to participate in bidding immediately.
・For construction work, it is necessary to apply for succession of bid participation qualifications after obtaining a construction business permit, which takes time.
What do you think of the above?
We will continue to share various M&A information regarding bidding.
