Recent updates on merger review practices in Japan

 Authors: Attorney-at-Law Tomohiro Kandori
Attorney-at-Law Ryo Sakamoto
Foreign Attorney* Rafaell Rafaell Tomonori Fernandez
* (not admitted in Japan)

February 2024

The impact of merger control regimes under the Antimonopoly Act of Japan on M&A transactions

Under the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (Act No. 54 of 14 April 1947), commonly known as the Antimonopoly Act (‘AMA’), certain M&A transactions involving the acquisition of shares and other transactions as prescribed by the AMA  (‘Merger’) are prohibited if they ‘substantially restrain competition in any particular field of trade’. Furthermore, in conducting a Merger that meets certain thresholds, a prior notification to the Japan Fair Trade Commission (‘JFTC’), the enforcement agency of the AMA, is required by the AMA . For Merger transactions whose impact on competition is relatively significant, such as Mergers between rivals (‘Horizontal Mergers’) in markets where oligopoly is progressing, the JFTC will use various specialised review methods. In such cases where specialised review methods are used, the period for obtaining clearance  from the JFTC may be prolonged. This may delay the completion schedule of the Merger, while imposing constraints on preparation for the execution of the transaction from the perspective of preventing so-called ‘gun jumping’ under competition laws. Moreover, as a result of the JFTC’s use of various specialised review methods, the review could be more burdensome than the parties to the Merger would have initially expected. Furthermore, as a result, they may have to consider implementing remedial measures to address the JFTC’s concerns, or even abandoning the Merger altogether.

In this newsletter, we will outline the review methods that have been emphasised as important by the JFTC in recent cases, as well as the practical considerations in dealing with such review methods. Please note that the opinions expressed in this newsletter are the personal views of the authors, and do not represent the official views of PwC Legal Japan or the department to which they belong.

1. Review methods that have been emphasised as important by the JFTC in recent cases, and practical considerations in dealing with such reviews
2. Other points to keep in mind when responding to the JFTC’s request for submission of various documents 

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