JAPAN Trends and Developments Contributed by: Norihiro Sekiguchi, Daisuke Mure, Yuki Kuroda and Ryosuke Sogo, Oh-Ebashi LPC & Partners
Oh-Ebashi LPC & Partners 2F, Kishimoto Building 2-2-1 Marunouchi, Chiyoda-ku Tokyo 100-0005 Japan Tel: +81 3 5224 5566 Fax: +81 3 5224 5565 Email: general_toiawase@ohebashi.com Web: www.ohebashi.com/en
M&A Key developments in M&A law and regulations The most notable regulatory development in Japan’s M&A landscape during 2025–26 has been the ongo - ing reform of the Companies Act, which is expected to materially affect transaction structuring and exe - cution. While the recent amendments to the tender offer (TOB) regime coming into effect in May 2026 have already been widely discussed, the forthcoming Companies Act reforms are particularly relevant for practitioners and investors structuring acquisitions in Japan. A central feature of the proposed reform relevant to M&A practice is the acceleration of squeeze-out transactions. Under the current regime, a bidder can compulsorily acquire minority shares only after reach - ing a 90% voting threshold. Where this threshold is not met, alternative methods such as share consolida - tion must be used, which require shareholder approval and significantly prolong the process. The proposed amendment would allow a squeeze-out at a two-thirds ownership level, subject to the establishment of a majority of minorities condition as the minimum tender condition in the preceding tender offer. This change is expected to substantially enhance the speed and certainty of going-private transactions. Another key development would be the expansion of stock-for-stock acquisition structures. The current share delivery framework ( kabushiki kofu ), which ena - bles the use of an acquirer’s shares as consideration, is subject to practical limitations – this scheme cannot
be used for increasing ownership in existing subsidi - aries and the target company is limited to domestic corporations ( kabusiki kaisha ). The proposed amend - ments aim to relax these constraints, thereby ena - bling greater flexibility in stock-for-stock transactions, including cross-border deals. In addition, the reform introduces mechanisms to identify beneficial shareholders. Japanese compa - nies have faced practical difficulties in identifying ulti - mate beneficial owners behind nominee custodians. The new framework would allow listed companies to request such custodians registered as shareholders to disclose information on beneficial owners, with an administrative fine in case of non-compliance due to intentional misconduct or gross negligence. If a ben - eficial shareholder, who holds more than 5% of the shares of a listed company, fails to file a large share - holding report under the securities regulations, its voting rights would be suspended. This development seeks to enhance transparency and address concerns regarding undisclosed stakebuilding. Taken together, these reforms point towards a legal environment that increasingly emphasises speed, flexibility and transparency. For deal makers, this translates into more efficient take-private processes, broader structuring options, and a reduced ability to accumulate stakes anonymously.
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