Magic triangles
SUPPLEMENT - THE 2008 GUIDE TO JAPAN - January 01, 2008
Mori Hamada & Matsumoto
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After much controversy, it is now possible under Japanese law for a non-Japanese company to use its shares as consideration to acquire a Japanese corporation in a triangular merger. It was originally planned that the legislation making this possible would become effective with the introduction of the new Japanese Companies Act on May 1 2006. But strong opposition from Japanese business groups fearing a foreign invasion by way of hostile takeovers delayed the Act's introduction for one year; this allowed Japanese companies to adopt defensive measures. With battlements fortified, access to Japanese shores was granted to the triangular merger on May 1 2007.
On October 2 2007, the first public deal to use triangular merger methods under the new Companies Act was announced by Citigroup and Nikko Cordial Corporation (NCC). Citigroup will acquire all the remaining issued shares of NCC in exchange for shares of Citigroup.
The new Act
The methods...
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