Invitation for Public Comments on the Draft of “Fair M&A Guidelines; Enhancing Corporate Value and Protecting Shareholders’ Interest”
May 15, 2019
The Ministry of Economy, Trade and Industry (METI) has drafted the “Fair M&A Guidelines; Enhancing Corporate Value and Protecting Shareholders’ Interest,” and invites public comments.
Taking into consideration opinions from in and outside of Japan, METI will thoroughly revise the “Guidelines for Management Buyout (MBO) to Improve Corporate Value and Secure Fair Procedures” (hereinafter referred to as the “MBO Guidelines”) and formulate the “Fair M&A Guidelines; Enhancing Corporate Value and Protecting Shareholders’ Interest.”
1. Background and Purpose
On September 4, 2007, METI formulated the MBO Guidelines, aiming to present fair rules for MBO.
Some have called for the revision of the MBO Guidelines based on Japanese companies’ experience accumulated over the 10 years since the formulation of the Guidelines on practical and legal matters and amidst changes in the environment which listed companies face, including the progress of corporate governance reform. Others have pointed out that it is necessary to discuss issues regarding conflict of interest in M&A transactions other than MBO, such as acquisition of a controlled company by its controlling shareholder.
In response to these calls, METI launched the Fair M&A Study Group (Chairman: Hideki Kanda, Professor, Gakushuin University Law School) in November 2018 to discuss the issue of whether or not the MBO Guidelines should be revised and to examine future directions for revision from the perspective of ideal approaches to fair M&A in Japan, and discussions were held within the study group.
Based on discussions in the study group, in terms of the ideal approaches to fair M&A that should be shared among Japanese businesses from the perspectives of enhancing corporate value and protecting shareholders’ interest, METI confirmed the necessity of newly presenting reorganized ideas, including principles and practical measures to be taken based on such ideas, mainly regarding MBOs and the acquisition of a controlled company by its controlling shareholder, and will thoroughly revise the MBO Guidelines and formulate the “Fair M&A Guidelines; Enhancing Corporate Value and Protecting Shareholders’ Interest.”
METI invites public comments on the draft of the Fair M&A Guidelines compiled by the study group in order to receive various opinions from in and outside of Japan.
2. Details of public comment (materials on which public comments are welcome, submission method, etc.)
3. Period (starting date and closing date of public comment process)
From May 14 (Tue.) to June 12 (Wed.), 2019 *
*Note: Comments will be accepted until 12:00 a.m. (local time) on June 13 (Thu.), 2019.
- Reference materials and the summaries of the discussions regarding the Fair M&A Study Group are currently on the METI website.(in Japanese)
Division in Charge
Corporate System Division, Economic and Industrial Policy Bureau