JAPAN Law and Practice Contributed by: Raku Raku, Gen Takahashi, Yoshihiro Morisato and Taku Matsumoto, Anderson Mōri & Tomotsune
3. Mergers and Acquisitions 3.1 Transaction Structures
the record high, and the aggregate value of M&A deals involving Japanese buyers in the first half of 2025 hit JPY30 trillion for the first time in history, according to some sources. Typical deals recently seen in the Japanese M&A mar - ket include the following: • divestures of the non-core businesses or less important subsidiaries of Japanese conglomerates and corporations to improve the efficiency of their operations; • aggressive investments by foreign-based private equity funds into Japanese businesses/assets; • family-owned private companies selling their entire business to a larger buyer; and • corporate transactions involving the increasingly popular concepts of SDGs/ESG. In addition to the above, the emergence of activist funds has also led to the increase in the number of takeovers without consent. This trend seems to have been accelerated by the introduction of the Guidelines for Corporate Takeovers. Under the new guidelines, the management of a target company is now required to consider more seriously whether an acquisition is desirable from the perspectives of enhancing corpo - rate value and the common interests of shareholders. This has meant that proposals from potential acquir - ers cannot just be rejected without examining their merits. It is very difficult to predict whether these trends will continue in 2026 and onwards, especially because it is still uncertain whether the Japanese economy will be further affected by the depreciation of the yen, the global recession, and the political change that took place in Japan, specifically the assumption of the office of prime minister by Sanae Takaichi in 2025. However, there is reason to be generally positive about the stability of the Japanese M&A market considering that a number of Japanese companies are still actively seeking the opportunity to use their abundant funds for new M&A deals.
Share deals, asset deals, and corporate reorganisa - tion transactions such as mergers and share exchang - es are often used in Japan. In general, with respect to the acquisition of more than one third of the shares in a public company, mandatory tender offer or takeover bid (called a TOB in Japan) regulations will kick in. One of the main legislative purposes of the TOB reg - ulations is to provide general shareholders with an opportunity to consider whether to accept the pur - chaser’s offer on an informed basis. The Financial Instruments and Exchange Act (FIEA) provides for strict disclosure rules for a TOB, including: • a public notice; • a TOB registration statement and TOB prospectus; and • the announcement of an opinion by the target company. Other than corporate reorganisation transactions, the consideration for acquisitions is generally cash. How - ever, in order to facilitate domestic and cross-border M&A transactions, relevant laws and regulations have been reformed in 2021 and it is now easier to use the purchaser’s shares as consideration in the transac - tion. As legal structures for M&A transactions become more flexible, the creation of tax-efficient transaction schemes may become the most critical issue for com - panies/businesses in Japan. 3.2 Regulation of Domestic M&A Transactions Other than the regulatory regime under the FEFTA which, basically, applied to FDI, major relevant regu - lations in connection with domestic M&A transactions are antitrust/competition regulations and TOB regu - lations. For antitrust/competition regulations, please see 6. Antitrust/Competition . The TOB regulations, as stated in 3.1 Transaction Structures , generally apply to acquisitions of more than one third (or 5%, if the number of counterpar - ties within 60 days is more than ten) of the voting
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