JAPAN Trends and Developments Contributed by: Norihiro Sekiguchi, Daisuke Mure, Yuki Kuroda and Ryosuke Sogo, Oh-Ebashi LPC & Partners
M&A Key developments in M&A law and regulation In 2024 and 2025, the most important develop - ment in M&A law and regulation has been the amendment of the Financial Instruments and Exchange Act (FIEA), which will revise the rules regarding tender offers. The amended bills of FIEA were passed in May 2024, and the amend - ed relevant ordinances were published in July 2025. These will come into effect in May 2026. The main amendments are: • lowering the one-third threshold of a manda - tory tender offer to 30% in line with that of other major jurisdictions; and • mandatory application of a tender offer for the acquisition of shares in excess of 30%, even in a market trade, which are currently not subject to the requirement of a tender offer. With this amendment, the previous complicat - ed regulations have been eliminated, including abolishment of the restrictions on “rapid pur - chase”, namely the regulations that restricted cases where an acquirer obtains voting rights in excess of one-third of the total voting rights through the acquisition of listed shares through a combination of transactions within and outside the market, without a tender offer process, with - in three months. As a result, the requirements for triggering a tender offer have been organised into only two categories: • situations where a purchase is made and the shareholding ratio exceeds 30% (including further purchase by a purchaser who already owns more than 30%); and • situations where a purchase is made through off-market transactions from numerous par - ties and the shareholding ratio increases from more than 5% to 30%.
There may be several practical implications from this amendment. Among them, the “rap - id purchase” rule, as amended, will no longer prohibit transactions in which a buyer acquires listed shares held by a parent company or major shareholder up to 30% or less and then makes a tender offer to acquire more than 30% of the shares. Until now, if a hostile bidder initiated a tender offer after a friendly bidder acquired less than 30% of the target shares from a major shareholder of the target company, to establish an alliance, the friendly bidder could not initiate a competing tender offer for three months as a white knight because of the ”rapid purchase” rule. However, after the amendment, such trans - actions will be possible. The amendments also include revisions that could have the effect of reducing “parent-sub - sidiary listings” (see below). Under the existing regulations, a parent company holding more than 50% of the shares of a listed subsidiary can purchase up to less than two-thirds of the shares without a tender offer as an ”exempt pur - chase”. Based on this exemption, there have been tender offer cases to convert listed compa - nies into subsidiaries, where the limit of shares to be purchased is set at a level between 51% to two-thirds, and the target company main - tains its listing after becoming a subsidiary, and then acquires additional shares up to less than two-thirds without a tender offer for various pur - poses. However, under the current amendment, this exemption will be eliminated, and a major shareholder holding more than 30% will be able to buy additional shares without commencing a tender offer, as an exception to the first category above, only if the increase in its shareholding ratio is less than 0.5% in one purchase and it did not purchase the shares of the target company within the past six months. Since the methods for parent companies to purchase more shares
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