JAPAN Law and Practice Contributed by: Hajime Tanahashi, Takayuki Kihira, Kenichi Sekiguchi and Akira Matsushita, Mori Hamada
1. Trends 1.1 M&A Market
Decisions or Legal Developments and 9.1 Hos- tile Tender Offers ). 1.3 Key Industries M&A activity in Japan has been seen in a wide range of industries, including electronics, semi - conductor device/equipment, pharmaceutical, healthcare, IT services, entertainment, con - sumer, retail, logistics, financial, insurance and chemical sectors. 2. Overview of Regulatory Field 2.1 Acquiring a Company A company is acquired in Japan by a share acquisition or a business (asset) acquisition. This can be accomplished through a contrac - tual purchase of shares or business (assets), or a statutory business combination (or corpo - rate restructuring), conducted pursuant to the provisions of the Companies Act (ie, a merger, share exchange, share transfer, company split, or share delivery mechanism). A forward triangular business combination – such as a merger whereby a merger subsidiary of an acquirer merges with a target company whose shareholders receive the parent’s (acquir - er’s) stock – is permitted under the Companies Act. Share Acquisition A share acquisition from one or more third par - ties (other than the issuing company itself) may be made through an “on-market” or “off-market” transaction. Whilst the current tender offer rules under the Financial Instruments and Exchange Act (FIEA) do not generally apply to market transactions, an off-market acquisition of shares of a listed company is subject to the tender offer rules if an acquirer seeks to acquire shares in
The number of M&A transactions in 2024 increased by 17.1% from 2023, making 2024 a record year. Total transaction value in 2024 increased by 8.0% from 2023, to become the second highest ever. There was an increase in all types of transactions – domestic, inbound and outbound – demonstrating the strength of the Japanese M&A market. It seems as though this trend will continue in 2025. 1.2 Key Trends The sale of non-core businesses and changing business portfolios by Japanese companies is a continuing trend. The Tokyo Stock Exchange as well as market investors (including activist share - holders) have maintained pressure on Japanese listed companies to increase growth and cor - porate value and maximise shareholder returns. Private equity funds continue to be active as potential buyers. In several transactions, PE funds have acquired target listed companies that have become subject to activist pressure. Management buyout transactions also continue to be popular for some management. Another trend is the continuing uptick in unso - licited or hostile takeovers and competing bids. Notably, a Canadian convenience store chain, Alimentation Couche-Tard made a proposal to acquire Seven & i Holdings in August 2024, the top Japanese convenience store chain. Nidec made another unsolicited offer for Makino Mill - ing Machine in December 2024, subsequent to the success of its unsolicited offer for Takisawa Machine Tool in 2023. Without doubt, this trend is due in part to the Takeover Guidelines issued by the Ministry of Economy, Trade and Industry (METI) in August 2023 (see 3.1 Significant Court
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