7.M&A

Q6 (Antimonopoly Issues in Share Purchases)

In buying the shares of another company, in what cases will the procedures under the Antimonopoly Act be required?

Under the Antimonopoly Act, a Business Combination that substantially restricts competition in a certain field of trade is prohibited. Specifically, if (i) the total domestic sales of the acquiror or the group to which it belongs exceeds 20 billion yen, (ii) the total domestic sales of the target and its subsidiaries exceeds 5 billion yen, and (iii) the total percentage of voting rights of the target after the acquisition held by the acquiror and any companies belonging to the same group as the acquiror exceeds 20% or 50% as a result of the transaction, a prior notification to the Japan Fair Trade Commission is required (Antimonopoly Act Article 10, Section 2). Further, until 30 days has passed from the receipt of such notification, the proposed share acquisition cannot be completed (Antimonopoly Act Article 8).

(Posted: January 27, 2012)