JAPAN Trends and Developments Contributed by: Takeshi Iitani, Reid Monroe-Sheridan, Takahito Fujii, Akira Kawashiro and Daisuke Eguchi, southgate
Increased M&A Activity METI Guidelines for Corporate Takeovers; hostile takeover bids on the rise In 2023, the Ministry of Economy, Trade and Industry (METI) published the Guidelines for Cor - porate Takeovers (the “Guidelines” ). The Guide - lines aim to provide as much clarity as possible on the code of conduct for the board of direc - tors of a company when receiving an unsolicited takeover bid. Specifically, the Guidelines state that: • company management should promptly report an acquisition proposal to the board upon receipt; • the board should give “sincere consideration” to any “bona fide” offer; and • if the board agrees to the bid, it should rea - sonably attempt to secure terms aligned with shareholder interests and determine whether the acquisition enhances the company’s cor - porate value. In addition, the Guidelines provide information on anti-takeover policies and countermeasures, such as “poison pills” . By clarifying regulations and establishing requirements for boards to give due consid - eration to acquisition proposals, the Guidelines have emboldened strategic buyers, including private equity funds, to make takeover bids for other companies. As a result, the number of takeover bids is on the rise, from 79 in 2023 to 90 in 2024. One emblematic example is Nidec Corporation’s hostile takeover bid for Makino Milling Machine in December 2024 (following on the heels of acquisitions of three other machine tool makers in the past four years: Mitsubishi Heavy Industries Machine Tool, OKK and Taki - sawa). In an initial press release announcing the bid on 27 December 2024, Nidec emphasised its
compliance with the Guidelines and expressed its expectation that Makino would comply as well, highlighting the influence of the Guide - lines in shaping the takeover process. Makino, too, referred heavily to the Guidelines in a press release responding to Nidec’s tender offer. The company stated that it was “carefully evaluat- ing” the bid according to the criteria established in the Guidelines, such as whether the acquisi - tion would “enhance the corporate value of the Company” and provide adequate benefits to shareholders. Bain Capital’s announced hostile takeover bid for IT company Fuji Soft also illuminates the increasing assertiveness of foreign equity firms in the Japanese M&A market. Although the board at Fuji Soft rejected Bain’s bid, Bain per - sisted in its bidding war with KKR until it was quashed by KKR’s second-stage tender offer in February 2025. A changing environment for MBOs Growing pressure on listed companies from a variety of stakeholders has contributed to the record-high number of MBO transactions. Both activist shareholders and the Tokyo Stock Exchange are calling for listed companies to improve corporate governance and use capi - tal more efficiently. Combined with the surge in takeover proposals propelled by the introduction of the Guidelines, the burdens on listed compa - nies are mounting. Delisting, therefore, has become an attractive option for companies seeking to alleviate those burdens. In one representative deal, outdoor goods manufacturer Snow Peak went private under an MBO with Bain’s support in April 2024. Spurred by heightened interest in camping and hiking during the COVID-19 pandemic, Snow Peak’s value peaked in 2021 before its finan -
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