JAPAN Law and Practice Contributed by: Yusuke Murakami, Nobuhiko Suzuki, Yuma Ito and Masataka Hayano, Mori Hamada & Matsumoto
bonized Power Auctions (since 2024) support power plant projects fuelled by hydrogen, LNG, nuclear, renewables, and battery storage with a guaranteed 20-year subsidy to cover total capex. Japan is restructuring its power sector through market reforms, stricter compliance, community engagement, and technology promotion. By combining renewables, nuclear, hydrogen, ammonia, carbon pricing and CCS, the country seeks a resilient, low-carbon electricity system aligned with global climate goals. 7. Due Diligence/Data Privacy 7.1 Energy and Infrastructure Company Due Diligence In an amicable transaction, a public company may disclose any information in the due diligence process given that the company has executed an NDA with the bidders. However, if a bidder has obtained any non-public material information, in principle, the bid- der may not purchase the shares of the target com- pany unless the company officially makes public such information in advance under the insider trading regulations in Japan. The Fair Disclosure Rule under the FIEA will not apply if the purchaser and the target company have executed an NDA which restricts the purchaser from selling or purchasing the shares of the target company. A target company does not necessarily have to dis- close the same information to all bidders, but limiting the scope of due diligence only against certain bidders (eg, a hostile bidder making a bona fide offer) with- out any reasonable ground may cause the risk of the violation of fiduciary duty of the directors depending on the circumstances. In addition, from a competition law perspective, it is common for a target company to share certain sensitive information only with a “clean team” of bidders who are not in charge of the busi- ness operation and such arrangement helps to avoid the risk of gun-jumping regulations. 7.2 Restrictions Under the Personal Information Protection Act of Japan, personal information cannot be transferred to a third party without the consent of the subject individ-
ual. However, when a business is succeeded through mergers, company splits, business transfers, etc, and personal data related to such transferred business is provided to a third party, the recipient of such data is not considered a third party to whom the provision of personal information is prohibited. In practice, it is often necessary to provide materials that include personal data (such as employee lists and key customer information) upon the request by the purchaser in the due diligence process. In such cas- es, it is interpreted that the target company may pro- vide personal data pursuant to the exemption above, provided that the purchaser and the target company execute a confidentiality agreement. Other than the above, there is no legal or regulatory restriction that would particularly limit due diligence of an energy and infrastructure company. In launching a tender offer bid, the acquirer must file a tender offer registration statement with a local finan- cial bureau, which will be publicly available online and make a certain press release. Even if a listed company receives a bid proposal from a potential acquirer, there is no legal requirement for the potential acquirer or the target company to dis- close the fact regarding such proposal. In the event that the information about such bid proposal is leaked or made public by the potential acquirer, the target company will likely need to make a concise announce- ment as to whether it is true that the bid proposal was made and the company is considering such offer, tak- ing into account the status of its consideration. Under the insider trading regulation, if a potential bidder recognises the fact that another third-party entity has decided to commence certain accumulation of shares, such potential bidder cannot launch a tender offer unless the fact of such third party’s decision has been publicly disclosed. Hence, the tender offeror needs to disclose in its tender offer registration statement the information on the other entity’s bid offer if there is a non-public competitive bid offer from another entity. 8. Disclosure 8.1 Making a Bid Public
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