Featured Articles

September 2005 -- The recent bid for Nippon Broadcasting System (NBS) by startup Livedoor brought to the limelight a host of issues surrounding M&A activity in Japan.  In order to actively promote discussion surrounding increased M&A activity, the Ministry of Economy, Trade, and Industry (METI) released a set of guidelines covering issues such as increasing shareholder value and takeover and defensive tactics.  Mr. Satoshi Kusakabe, Director of METI's Industrial Organization Division, sat down with JETRO in August to discuss these Guidelines and the potential effect on Japan’s M&A sector.

JETRO: Would you talk a bit about what you are doing here in the U.S.?  What is the Japanese government aiming to achieve through introductions of these guidelines?  Is Japan seeing any changes already due to the introduction of these Guidelines?

Kusakabe: Our main objective is for American investors to first understand that the Japanese government is strongly committed to promoting M&A, and through this we want to create greater investment in Japan. During my trip I have met with many foreign firms and corporate investors. Along with having meetings in Europe and the US in May of this year, meetings were held in Japan from fall 2004 up until spring 2005. Through these activities we introduced the overall trends of Japan’s M&A policy and its future development.

One reason for these meeting is that there is a lot of M&A activity in Japan’s corporate environment, and foreign firms and foreign investors are major players supporting this activity. Consequently, M&A is vitally important from the standpoint of how it will change Japan’s corporate environment, and the main players clamoring for M&A are overseas institutional investors. In coming to the U.S., we want to create effective communication with these investors and show that the Japanese economic environment is positively dealing with M&A.

These takeover defense guidelines have been created by METI with corporation of Ministry of Justice (MOJ). Without hearing a direct explanation from METI, many people will think these guidelines were developed in order to protect Japanese corporate managers. Therefore, coming directly to America to explain the goals of these guidelines to investors and to explain METI’s stance has been fruitful. By this, I mean that I believe that investors understand that Japan is dealing with M&A very positively.

JETRO: What has been the American response to the METI guidelines?

Kusakabe: The reaction towards METI’s Guidelines coming from these corporate investors has been largely positive.  To put it politely, the reaction up until these investors had heard METI’s explanation of the Guidelines was largely negative.  There were those who seemed to believe that METI had partnered with corporate managers and these Guidelines were meant to protect corporate managers. After the contents of the Guidelines were clearly explained, however, most people understood that these Guidelines are more shareholder friendly than takeover defense guidelines that have been developed in America.