Comparative Guides

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4. Results: Answers
Merger Control
Tips and traps
What are your top tips for smooth merger clearance and what potential sticking points would you highlight?

Answer ... In a horizontal business combination with a high market share, the review period tends to be extended. For example, the acquisition of shares in Ju-Hachi bank by Fukuoka Financial Group took over two years from receipt of notification to clearance. This trend is expected to continue in the future, so in critical cases it is important to utilise pre-notification consultation proactively and appropriately. In the pre-notification consultation, the parties can provide materials in order to explain to the JFTC the outline of the case and the market definition from their perspective, and demonstrate that the proposed transaction will not substantially restrain competition in any particular field of trade.

In addition, there has recently been an increase in cases in which economic analysis is used to define the market and to determine whether competition would be substantially restrained in the market. It would therefore be worthwhile to obtain an economist’s opinion as part of the pre-notification consultation.

Also, in critical cases evidence based on interviews and questionnaires from competitors and customers may have a significant impact on the Japan Fair Trade Commission’s (JFTC) decision. Such interviews and questionnaires will be conducted by the JFTC, but the parties should also confirm the survey method and the content of the questionnaires.

In summary, the parties should put together a detailed schedule, prepare explanatory materials and economic analysis, and actively communicate with the JFTC throughout the review period, including the pre-notification consultation.

For more information about this answer please contact: Kentaro Toda from TMI Associates
Merger Control