Connect with us

Hi, what are you looking for?

Economy

Japanese companies cannot use national security cover to block takeovers, official says

By Makiko Yamazaki and Ritsuko Shimizu

TOKYO (Reuters) – Japanese companies cannot use a national security designation as a tool to thwart foreign takeovers, a senior finance ministry official said, pushing back at speculation Tokyo’s foreign exchange act could be manipulated for protectionism.

The comments follow media reports retail giant Seven & i Holdings is seeking to be classified as “core” to national security under the Foreign Exchange and Foreign Trade Act (FEFTA) to fend off a buyout bid from Canada’s Alimentation Couche-Tard.

The senior official, who declined to comment on individual deals, told Reuters the issue of “core” classification doesn’t change the process of the government’s security review in cases of foreign bids for companies designated as significant to Japan’s economy or security.

Seven & i, with a market value of $38 billion, is currently categorised in the finance ministry’s classification list as a company that conducts “designated”, not “core”, businesses.

Businesses considered “core” are those deemed crucial for national security, including nuclear power, space and semiconductors.

Foreign entities face stricter requirements to notify the government in advance when attempting to acquire a stake in a company with a business classified as “core” than they do when targeting companies in “non-core” sectors.

But in the case of acquiring control in any so-called “designated business”, a would-be buyer must file prior notification regardless of whether the target is “core” or “non-core”, the official said.

The official added that the classification doesn’t affect the degree of scrutiny during its review on national security, saying that the government “will examine whether the transaction would pose risks to national security.”

The ministry’s classification list regarding prior notification requirements is based on surveys of all listed companies. The classifications there “are not something that would need government approval,” the official said.

The official declined to be named due to the sensitivity of the issue.

When asked about the reported pursuit of the “core” tag, Seven & i said it replied to the ministry’s latest survey by the Aug. 23 deadline detailing the company’s current structure and businesses.

The survey is not related to Couche-Tard’s buyout proposal, which the Japanese company revealed on Aug. 19, Seven & i said.

Convenience stores, Seven & i’s mainstay business, are not a designated sector that requires FEFTA review, but the group has wide-ranging businesses including financials and security.

Japan in 2008 blocked the London-based Children’s Investment Fund from buying shares in Electric Power Development Co, known as J-Power. That’s the only deal that has been rejected under the FEFTA, but there are cases where plans have been modified or withdrawn during reviews, according to the finance ministry.

This post appeared first on investing.com

You May Also Like

Investing

Fisker (NYSE: FSR) stock price has been one of the best-performing electric vehicle (EV) stocks this week even as Tesla slumped. The shares jumped...

Investing

Newmont (NYSE: NEM) reported mixed financial results even as the price of gold approached its all-time high. In all, the company’s earnings per share...

Investing

The Fox Corporation (NASDAQ: FOX) stock price has been under pressure as investors come to terms with the abrupt firing of Tucker Carlson. The...

Investing

NatWest (LON: NWG) share price rose sharply, helped by the strong results from Barclays. The stock jumped to a high of 274.8p, which was...




Disclaimer: Oldamericanbroker.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the-company.


Copyright © 2024 Oldamericanbroker.com