Within a year of a new tax deferral scheme taking effect, at least three of Japan's largest conglomerates will announce non-core carve outs worth over $1 billion each.

METI's plan to defer capital gains tax on reinvested business sale proceeds removes the main disincentive that has kept firms hoarding underperforming units for decades. Expect foreign private equity buyers, not domestic rivals, to be the primary acquirers of these newly divested assets.