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What are the potential outcomes of a merger control investigation in Japan?

If the Japan Fair Trade Commission (JFTC) formally or informally notifies the parties of antitrust concerns raised by a proposed business combination, the participating companies can offer remedies and start discussions with the JFTC. This usually occurs during the JFTC notification review process, although some companies propose a plan of remedies from the beginning in order to accelerate the approval process.

The Merger Guidelines provide that, in principle, the remedies should require structural changes to maintain competition in the relevant market where an adverse impact on competition is foreseeable, rather than mere behavioural restrictions on the participating companies. However, if any special reasons justify behavioural remedies, such remedies may also be considered to the extent that the JFTC deems appropriate. The remedies agreed to by the participating companies are made public by the JFTC. The remedies in a particular case depend on the antitrust issues raised by that given case, and may well depend on the facts and issues in that case.

The Merger Guidelines provide that, in principle, remedies should be implemented before closing of the transaction. However, the guidelines also provide that in exceptional cases the participating companies may close the transaction before the implementation of remedies, if the details have been approved and implementation deadlines have been set. If the remedies involve the divestiture of a certain business, the JFTC usually considers it more appropriate for the participating companies to identify the buyer before closing the transaction, and sometimes requires prior JFTC approval.

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