The vast impairment of the overseas business (Dentsu International) and the turn away from M&A (2025)

Growth that was bought, and the cost of unwinding it

The heart of this decision lies in the fact that growth bought through acquisition turned, as it stood, into a future burden in the form of goodwill. Taking the 2013 Aegis acquisition as its opening, Dentsu expanded abroad and, deal upon deal, became an advertising group of global scale. But if the earning power of the businesses obtained there falls short of what was assumed, the goodwill that has piled up surfaces all at once as impairment. Under a dual structure of resilient domestic advertising and structurally weak overseas digital, Dentsu Group set a record loss for two consecutive years. The scale the acquisitions delivered was also, at the same time, the assumption of impairment risk.

The return from an M&A-heavy path to organic growth that President Igarashi set out in the medium-term plan was coherent as a reconsideration of the expansion strategy. Yet the impairments ran for two years, the attempted sale of overseas businesses failed to gather enough buyers, and it went as far as a change in the management structure. The cost of liquidating bought growth is heavier than the original estimate. How to lighten the goodwill accumulated overseas, and how far the struggling digital business can be rebuilt — the task handed to the new Sano administration shows that growth achieved through acquisition is not easily wound back.