The government has launched a strong push to promote mergers and acquisitions as a succession solution for around 56,000 manufacturing small and medium-sized enterprises. As many business owners approach retirement, officials aim to prevent closures that could damage jobs, supply chains, and regional economies.
Succession Crisis Threatens Manufacturing SMEs
Across the manufacturing sector, thousands of SME owners face succession challenges. While many businesses remain profitable, owners often struggle to find family members or internal managers willing to take over. Consequently, companies with decades of expertise risk shutting down.
To counter this trend, the government now encourages owners to consider M&A as a strategic exit option instead of liquidation.
Why M&A Is a Practical Solution
M&A-based succession allows businesses to continue operations under new ownership. At the same time, it protects employees, preserves technical know-how, and maintains relationships with suppliers and customers. For buyers, these deals offer faster market entry and access to skilled workforces.
Moreover, manufacturing SMEs often hold specialized technologies. Through M&A, acquiring firms can retain and expand these capabilities, strengthening overall industrial competitiveness.
Government Support and Policy Measures
To accelerate adoption, the government plans to expand advisory services and provide financial support for M&A transactions. In addition, officials are developing matching platforms to connect SME owners with potential buyers more efficiently.
The government also intends to simplify procedures and reduce legal and administrative burdens. As a result, owners may feel more confident pursuing M&A deals.
Challenges Owners Still Face
Despite policy support, many SME owners remain cautious. Emotional attachment to their businesses, limited knowledge of M&A processes, and concerns about employee treatment often delay decisions. Therefore, experts emphasize the importance of early succession planning and professional guidance.
Industry groups also stress the need for education programs that explain company valuation, negotiation strategies, and post-merger integration.
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