The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Japan needs real merger reform and disclosure

Protectionist business interests risk derailing Japan's merger reforms to allow foreign companies to make non-hostile acquisitions in the country. M&A adviser Nicholas Benes argues that meaningful change is essential if Japan is to raise its woeful levels of foreign investment.

This article appears courtesy of International Financial Law Review

If legislators proposed a reform to restore a level competitive playing field, but then immediately grabbed back 99.8% of it in the fine print and continued discriminating against a section of the market, it would be very difficult to trust them again.

But this is what Japan is poised to do with its foreign direct investment (FDI) policy and its laws governing so-called cross-border stock swaps. It is an exceedingly poor way to attract investment.

It seems a small group of business interests is pressuring Japan's Ministry of Justice (MoJ) to draft the implementing regulations for Japan's new Company Law in a way that would effectively shut out more than 99.8% of foreign public companies from big cross-border mergers executed through stock swaps (technically known as triangular mergers).

In January 2003 prime minister Junichiro Koizumi took the laudable and courageous step of announcing a national goal to double the cumulative base of FDI in Japan over the next five years, from its current level of just over 1% of GNP to a level over 2% (most developed nations in the OECD are in the 20-30% range).

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree