Mergers in Japanese Company Law

Statistical data suggests that M&A activity in Japan is still increasing. With hostile takeover attempts such as the famous Livedoor and Bulldog Sauce cases, legal discourse has mainly concentrated on takeover law and the use of defensive measures. Lately, corporate restructuring transactions have become subject to public debate. By deregulating such transactions, the new Company Code has allowed for so-called triangular mergers where shareholders are forced into a shareholding position of the acquirer’s (possibly foreign) parent company.

In my presentation I will assess the various forms of corporate restructurings in their practical use and analyze their utility as tools for acquisitions as well as for intra-group restructurings. I will focus on mergers as the oldest and most representative of these actions and in a case study I will discuss the Citibank acquisition of Nikko Cordial Group, generally seen as the first triangular merger under the new law.

What are the typical conflicts that arise between shareholders, management and creditors (including employees) during changes of corporate control and structure? From the viewpoint of the German “Umwandlungsgesetz”, modeled after the EC Directive 78/855, I will analyze the treatment of dissenting shareholders who are most affected in such (squeeze-out) transactions. What general regulatory approaches can be distinguished and finally, does the Japanese system provide efficient protection?

Short CV: Deniz Guenal is a PhD candidate at the University of Cologne and currently JSPS Research Fellow at Chuo University. He holds an MA in Japanese Studies (Cologne) and passed the First Legal State Examination in Germany.