The Japan Fair Trade Commission plans to approve mergers and acquisitions among domestic shipbuilders and joint procurement of critical raw materials to strengthen economic security. With China in mind, it will also permit information sharing among companies receiving overseas acquisition proposals. The move aims to boost Japanese firms' international competitiveness and prevent technology leaks.
The Japan Fair Trade Commission (JFTC) plans to state that mergers and acquisitions among domestic shipbuilders, as well as joint procurement of critical raw materials like rare earth elements, pose no issues under the Antimonopoly Law. This initiative seeks to strengthen economic security and enhance the international competitiveness of Japanese companies while preventing technology leaks overseas.
Companies have reportedly hesitated to pursue such actions due to fears of violating merger restrictions or forming cartels under the Antimonopoly Law. To address this, the JFTC aims to clarify its stance and will present its views soon at an expert panel meeting of the Economy, Trade and Industry Ministry.
The JFTC expects to inform the panel that mergers between domestic companies, whose operations are already in an oligopolistic state in the domestic market, will not raise antimonopoly concerns if there are strong overseas competitors, resulting in a relatively small impact on competition. The shipbuilding sector faces growing needs for large-scale investments through integration to ensure international competitiveness, but merger regulations have hindered discussions. The JFTC's position is intended to facilitate these talks.
Additionally, the JFTC will permit information exchanges and joint procurement of critical minerals and other materials to prepare for potential supply disruptions, given high dependency on overseas supplies such as rare earths. In cases of severe shortages of critical raw materials, such exchanges for economic security purposes will not be considered violations under the Antimonopoly Law in principle.
To prevent technology leakage via acquisitions or alliances with foreign companies, the JFTC will clarify that information sharing between a targeted company and other firms, relevant ministries, agencies, or industry associations does not violate the Antimonopoly Law. This policy, with China in mind, supports Japanese firms against overseas proposals.