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Process and timing

Is the notification process voluntary or mandatory?

If the filing requirements (ie, the filing thresholds) are met, filing is mandatory. The participating company that is required to file depends on the type of transaction.

What timing requirements apply when filing a notification?

A notification may be filed if all necessary information is available and the participating companies have decided to proceed with the business combination, even before execution of the final agreement. If the notification is filed too early before the scheduled closing date and the market information at the time of closing materially changes, the Japan Fair Trade Commission may request supplementary information, or require the filing of a new report with a new waiting period. However, if there are no material changes in the market, the participating companies may close the transaction on submitting a report of changes after the first filing. In addition, the participating companies’ most recent financial data may be required to be filed if it becomes available after expiry of the waiting period but before the closing.

What form should the notification take? What content is required?

The Japan Fair Trade Commission has prescribed the format for notification depending on the type of transaction. A company which is required to file must complete the notification in the prescribed format in Japanese, including the necessary information and attaching certain prescribed documents (eg, the articles of incorporation, a copy of the agreements, minutes of the meetings of appropriate corporate organisations and financial reports), alongside a Japanese translation (or at least a Japanese summary of the relevant parts) thereof.

Is there a pre-notification process before formal notification, and if so, what does this involve?

Jurisdictional issues There is no mandatory process before filing of formal notification. With regard to a pre-notification process, the Japan Fair Trade Commission (JFTC) usually responds to questions regarding filing, such as in relation to the need to file under the Anti-monopoly Law.

Substantial issues A company that plans a business combination may consult with the JFTC in advance before filing a pre-notification. This prior consultation is not mandatory. During that process, the participating companies may consult not only regarding the description of a notification form, but also regarding the substantial issues (eg, the relevant product or geographic markets) and the factors which support that the transaction will not raise any anti-competitive concerns. Thus, the participating companies may provide, and the JFTC may request, information necessary for the JFTC’s formal review, including materials for the substantive analysis.

However, in case where filing is required, the JFTC will not give participating companies its formal views or opinions on the substantive issues during the course of this process. Only through the JFTC's formal review, which starts after the JFTC has formally accepted the filing, will the JFTC inform the companies of its opinion on the substantive issues.

There is no restriction on the timing of filing the pre-notification formally. That means the companies may decide with their discretion when they would like to formally submit the pre-notification at any time during the course of such informal prior consultation.

Informal prior consultation with the JFTC is also available for business combination for which filing is not required. In such case the JFTC provides the party companies with its formal opinion regarding substantive issues without filing.

Please see "Policies Concerning Procedures of Review of Business Combination" (JFTC guidelines, June 14 2011) for more details.

Pre-clearance implementation

Can a merger be implemented before clearance is obtained?

The closing of a transaction involving a business combination is subject to a waiting period under the Anti-monopoly Law (ie, at least 30 days after the Japan Fair Trade Commission’s (JFTC) acceptance of the filing) during which the JFTC reviews the business combination. Under the Anti-monopoly Law, this period may be shortened at the discretion of the JFTC if the filing party submits a written request to do so.

If the JFTC formally requests supplementary material and information (secondary request) for its further review, it may substantially extend the waiting period beyond 30 days.

The JFTC’s policy for reviewing business combinations sets down a fixed timeframe for review: in principle, this must be completed within 30 days after formal acceptance of the filing for the primary review, and 90 days after the JFTC accepts the report to respond to the secondary requests from the participating companies for the secondary review.

The JFTC review process and timeframe is as follows.

Primary review  During the 30-day waiting period, the JFTC may request the participating companies to provide various information that the JFTC deems necessary to review the case and reviews the business combination in question. If the JFTC determines that it should issue a cease and desist order (eg, divestiture) as a result of its review, it must notify the filing company. This period may be shortened at the JFTC’s discretion. However, in practice, it is unlikely that the JFTC will decide to issue a cease and desist order at this stage; instead, it usually issues a secondary requests to require the filing company to report and submit supplementary materials and information necessary to further review the planned business combination and enter in to the secondary review.

Secondary review If the JFTC issues a secondary requests during the waiting period, a separate period for the JFTC's review will apply of up to:

  • 120 days after receipt of prior notification by the JFTC; or
  • 90 days after the completion of the submission of the supplementary materials to respond to the secondary request, whichever is the longest. 

The JFTC must then reach a conclusion and inform the filing company accordingly.

Although the JFTC may not extend the period described above beyond the time prescribed by the Anti-monopoly Law for the secondary review, it may determine whether and when submission of the necessary documents is complete. Moreover, if the participating companies provide waivers, the review or waiting period may be extended.

The 90-day period does not begin until the participating companies have provided all information and/or materials requested by the JFTC.

Please see "Policies Concerning Procedures of Review of Business Combination" (JFTC guidelines, June 14 2011) for more details.

Guidance from authorities

What guidance is available from the authorities?

The "Policies Concerning Procedures of Review of Business Combination" (Japan Fair Trade Commission (JFTC) guidelines, June 14 2011) provide the JFTC review process in detail.

The Merger Guidelines, published on May 31 2004 and amended as necessary to reflect developments in the area, provide guidance on the substantive analysis.


What fees are payable to the authority for filing a notification?

No filing fee is payable.

Publicity and confidentiality

What provisions apply regarding publicity and confidentiality?

Filings are not published. However, with regard to some of the outcome of the primary review (ie, a review undertaken by the Japan Fair Trade Commission (JFTC) for up to 30 days after the acceptance of filing) that the JFTC believed as precedents of JFTC decisions, the JFTC will make such decisions public announcement with regard to the business combination.

The JFTC usually makes public the transaction when it decides to enter into the secondary review. The JFTC also makes the outcome of the secondary review public.


Are there any penalties for failing to notify a merger?

Failure to file or the inclusion of misrepresentations in a notification is subject to a criminal fine of up to Y2 million.

The Japan Fair Trade Commission (JFTC) may file an action to make void a merger, company split or joint stock transfer involving a business combination that was closed without filing under the Anti-monopoly Law.

If a business combination which was not notified is found to violate substantive law, it is subject to a cease and desist order from the JFTC, even after closing.

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