JAPAN Law and Practice Contributed by: Raku Raku, Gen Takahashi, Yoshihiro Morisato and Taku Matsumoto, Anderson Mōri & Tomotsune
• the HHI after the business combination is between 1,500 and 2,500, and the increase of HHI is no more than 250; or • the HHI after the business combination is more than 2,500 while the increase of HHI is not more than 150. The Business Combination Guidelines also provide that the JFTC is highly unlikely to conclude that any business combination falling within the following threshold would substantially restrain competition: • the HHI after the business combination is 2,500 or less; and • the market share of company groups after the In the review of business combinations, the JFTC may require remedies from the parties to a contemplated business combination. The Business Combination Guidelines illustrate certain types of remedies that the JFTC may require. Business Transfer From a Party Group to Its Competitor According to the Business Combination Guidelines, creating a new independent competitor or strengthen - ing its existing competitor should be the prime rem - edies. The Business Combination Guidelines provide the following as examples: • transferring of all or a part of relevant business to competitor; • dissolution of combination within the party groups (decrease of holding ratio of voting rights, etc); and • dissolution of business alliance with third parties. Other Remedies or Commitments The Business Combination Guidelines also provide the following remedies or commitments: business combination is 35% or less. 6.3 Remedies and Commitments • promotion of imports and new entries into the relevant market such as committing to allow importers to use stock or logistics facilities that are necessary for the relevant business; or • commitment on actions and conduct of the parties, such as committing to not exchanging sales infor -
mation between sales department and production department within the party group, etc. 6.4 Antitrust/Competition Enforcement The JFTC has the authority to block FDI that would result in the substantial restraint of competition in any field of trade, either before or after the investment is made. Decisions of the JFTC may be appealed in a competent court. In the case where FDI is made without the prior approval of the JFTC: • a cease-and-desist order by the JFTC to the relevant parties, which may include disposition of such investments, can be placed; and • a criminal penalty may be imposed on the relevant parties and individuals. 7. Foreign Investment/National Security 7.1 Applicable Regulator and Process Overview Relevant Authorities and Types of FDI Subject to Review Certain FDI in Japan requires review from the Minis - try of Finance and relevant ministries pursuant to the FEFTA. Among other actions, certain acquisitions of a Japanese company’s shares would require foreign investors to file a pre-closing FDI notification. The key factors to be examined in determining wheth - er a pre-closing FDI notification applies to a foreign investor’s contemplated acquisition of shares in a Japanese company are as follows: • whether the target is engaged in a designated busi - ness; • the stake that the foreign investor intends to acquire in the target; and • whether the target is privately held or listed on a Japanese stock exchange (acquisition of only one share of a privately held company would trigger pre-closing FDI notification, whereas acquisition of 1% or more of the shares of a listed company would trigger such notification).
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