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METI to Launch Fair M&A Study Group

November 7, 2018

The Ministry of Economy, Trade and Industry (METI) decided to embark on a new study group named the Fair M&A Study Group.

In 2007, METI formulated the Guidelines for Management Buyout (MBO) to Improve Corporate Value and Secure Fair Procedures (hereinafter referred to as the “MBO Guidelines”). Since then, business environments in Japan have continued to change, and in light of such changes, the study group will hold discussions concerning ideal approaches to fair M&A in Japan, including the necessity of revising the MBO Guidelines.

1. Background

As Japan is facing global changes in business environments accompanying the advance of the Fourth Industrial Revolution, it is critical for Japanese companies to make bold steps in restructuring their businesses and/or to utilize existing company resources efficiently through M&A in order to achieve sustainable growth and to increase corporate value over the mid- to long-term.

Efforts for clarifying ideal approaches to fair M&A and sharing recognition concerning these approaches with stakeholders are expected to contribute to the development of fair and healthy M&A in Japan. Moreover, these efforts will lead to increased predictability and reduced uncertainty in M&A transactions, and this will promote effective M&A. Furthermore, the efforts are expected to have a significant effect on enhancing global trust in Japan’s capital markets, thereby attracting overseas investors and encouraging investment in Japanese companies.

On September 4, 2007, METI formulated the MBO Guidelines, aiming to present fair rules for MBO*.

*Note: The term “MBO” refers to a purchase of shares of a targeted company by current top executives of the company subject to staying in business.

For the ten years since the formulation of the MBO Guidelines, Japanese companies have accumulated experience on practical and legal matters that are appropriate for discussion. In addition, listed companies are facing changes in social and economic circumstances, such as the progress of corporate governance reform including increasing the number of outside directors, and changes in the shareholding structure. In light of these changes, it is appropriate to discuss the revision of the MBO Guidelines.

Moreover, the MBO Guidelines prioritize the recommendations about MBO over other conflict of interest M&A transactions. Concerning this, some point out that it is necessary to discuss issues regarding conflict of interest M&A transactions other than MBO, such as acquisition of a controlled company by its controlling shareholder, as seen in a case where the parent company purchases a listed subsidiary company to make it a wholly-owned subsidiary company.

In light of these points, the study group will hold discussions concerning ideal approaches to fair M&A in Japan, including the necessity of revising the MBO Guidelines.

2. Study group’s initiatives

The study group will confirm the changes in business environments that occurred after the formulation of the original MBO Guidelines, and in light of these changes, it will discuss the issue of whether or not the MBO Guidelines should be revised and examine future directions for revision, with the goal of further developing Japan’s M&A in a fair and healthy manner. Based on this, it will discuss the items that need to be revised.

3. Future schedule

The study group will hold its first meeting as scheduled below:
First meeting: November 9 (Fri.), 2018; from 4:00 p.m. to 6:00 p.m.


  1. The meetings will not be open to the public, but a summary of the minutes of the meetings will be made public on the METI website at a later date.
  2. The following meetings will be held approximately once a month, and the study group will compile the discussions into a report around the spring of 2019.

4. List of study group members

5. MBO Guidelines

For the MBO Guidelines, visit the website below:

Division in Charge

Corporate System Division, Economic and Industrial Policy Bureau