NEW YORK -- Private equity giant KKR has emerged as the frontrunner to acquire Taiyo Holdings, the Japanese chemical manufacturer that holds more than half the global market for solder mask, according to reports.

The deal, if it closes, would mark another chapter in Japan's evolving M&A landscape, where foreign investment firms are increasingly finding opportunities as Japanese companies grapple with succession issues and pressure to unlock shareholder value.

Taiyo received competing bids in May from both KKR and Japan's Nippon Sangyo Suishin Kiko, prompting the company to establish a special committee to evaluate its options — everything from outright acquisition to strategic alliances. Both suitors have indicated they'd take the Tokyo-based company private, delisting it from public markets where it currently trades at a $3.5 billion valuation.

The situation gets interesting when you look at the shareholder dynamics. DIC Corp., which forged an investment alliance with Taiyo back in 2017, holds a 20% stake and effectively has veto power over any transaction. Hong Kong-based activist hedge fund Oasis Management controls another 11%. Earlier this year, Taiyo was reportedly exploring a merger with DIC that would have created one of Japan's largest industrial chemical players — talks that apparently didn't progress.

• Next