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Examination of Business Combinations by the Japan Fair Trade Commission During the Period Between FY 2006 and FY 2008

March 05, 2009

By Arata Nomoto and Yoichiro Wada

Amid the worldwide recession triggered by the financial crisis in the United States, while the number of M&A deals by investment funds has dropped, in various industrial sectors, global corporate restructurings which could affect the Japanese domestic market, as well as corporate restructurings in Japan, are expected to take place.

It is expected that companies planning such restructurings could confront possible infringement of the Act on Private Monopolization and Maintenance of Fair Trade, the Japanese Antimonopoly Act (the Act). As such, it is useful to understand the trend in the examination of business combinations by the Japan Fair Trade Commission (the JFTC) in recent cases.

Starting with an overview of the rules concerning business combinations under the Act and an examination of business combinations by the JFTC, this alert addresses the analytical framework the JFTC applies in determining whether such business combinations would have a substantial adverse effect on competition in a certain market, especially during the period between fiscal year 2006 and fiscal year 2008 in which the JFTC pointed out the issue of infringement of the Act with respect to certain business combinations which it examined (the Specified Business Combination).