Japan’s industry ministry has clarified that companies are not obligated to accept unsolicited takeover bids, even when investors offer substantial premiums, underscoring a renewed focus on protecting corporate autonomy and sensitive technologies. An official from the Ministry of Economy, Trade and Industry (METI) said an upcoming update to the country’s merger code will stress boards’ rights to turn down offers if they believe existing management can better enhance long-term corporate value or if there are concerns about asset stripping or technology outflows. The stance comes amid growing unease within the government of Prime Minister Sanae Takaichi over foreign acquisitions targeting firms with critical capabilities.
Japan has experienced a surge in unsolicited takeover approaches since METI introduced M&A conduct guidelines three years ago aimed at curbing excessive defensive tactics and promoting healthier consolidation. Deal activity involving Japanese companies reached a record 35.7 trillion yen last year, according to Recof Data, with eight unsolicited bids launched and half succeeding. Notable cases included Taiwan’s Yageo successfully acquiring Shibaura Electronics, while Canada’s Alimentation Couche-Tard withdrew its pursuit of Seven & i Holdings citing limited engagement.
The planned revision, however, may frustrate investors seeking stronger emphasis on shareholder returns, as boards could lean on broader interpretations of “corporate value” to resist deals. Hiroyuki Sameshima, a METI director, said shareholders would still have the final say by weighing disclosures from both management and bidders. Experts such as Kazunori Suzuki of Waseda Business School note that improved transparency around buyers’ growth and cost-cutting assumptions could help assess credibility, though preventing investors focused solely on high exit prices from tendering shares remains difficult.
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