Japan

The principal legislation governing the merger control regime is the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (the Antimonopoly Act or AMA, Act No. 54 of 1947, as amended).

The Antimonopoly Act prohibits mergers, acquisitions, and certain other corporate transactions where such transactions may result in a substantial restraint of competition in the relevant market (Chapter 4, AMA). For certain transactions that meet the thresholds discussed below, the Antimonopoly Act imposes a mandatory pre-closing notification obligation on parties to notify the Japan Fair Trade Commission (the JFTC).

For certain transactions that meet the thresholds discussed below, the regime is mandatory and suspensory.

For transactions below the thresholds, parties may voluntarily submit a quasi-filing and consult with the JFTC to obtain its views. Such voluntary filings do not have any suspensory effect.

The JFTC investigates mergers and determines whether to approve the transaction. The JFTC is established as an independent administrative commission. It is positioned as an external bureau of the Cabinet Office but exercises its authority independently from other governmental bodies including the Cabinet.

The decisions of the JFTC can be challenged in court. The JFTC orders, such as cease-and-desist orders, may be contested by filing an action for revocation. Under the Antimonopoly Act, the Tokyo District Court has exclusive jurisdiction as the court of first instance, and its judgments can be appealed to the Tokyo High Court and ultimately to the Supreme Court (Articles 85 and 87, AMA).

The regime applies economy-wide. There are also additional rules under the Antimonopoly Act governing voting rights holdings by banking and insurance companies. In principle, a bank may not hold more than 5% of the voting rights of another company, and an insurance company may not hold more than 10% of the voting rights of another company (Article 11, AMA).

Japan also has a separate regime governing foreign investment. Foreign direct investment into Japan is generally regulated by the Foreign Exchange and Foreign Trade Act. In addition, sector-specific regulations impose restrictions on foreign ownership in certain industries, such as telecommunications and broadcasting.

There is no supranational merger control regime applicable to Japan, nor is there any separate merger control regime within Japan.

The JFTC actively cooperates with foreign competition regulators, including those in the United States, the European Union, and Asia, particularly where transactions are subject to parallel review and raise substantive issues.

The JFTC also cooperates with other domestic agencies, including the Ministry of Economy, Trade and Industry (METI), the Financial Services Agency (FSA), and the Ministry of Internal Affairs and Communications (MIC), particularly where transactions involve regulated industries or require technical or specialized expertise. While the JFTC may exchange information with such agencies, it makes determination on competition issues independently and is not legally bound by their views.

As of May 1, 2026, no legislative reforms to the merger control regime are currently contemplated.

Recent reforms include:

• Effective December 17, 2019, the JFTC revised the Business Combination Guidelines and Procedure Policies (also known as Merger Guidelines) to address mergers in digital markets, as well as the Policies Concerning Procedures of Review of Business Combinations to address transactions falling below the notification thresholds, among others.
• Effective April 4, 2025, the JFTC revised the guidance on filing forms to enhance transparency and to reflect its latest practices.

The triggering events for merger control are the acquisition of voting shares exceeding 20% or 50%, the acquisition of business or assets, statutory mergers, and certain other corporate transactions as explained in Question 2.3, below. The acquisition of a minority share may be caught where it results in the acquisition of more than 20% of the voting rights.

Japan does not adopt a “change of control” test as the trigger for merger control. Instead, for share acquisitions, the thresholds are defined by reference to fixed voting rights percentages (i.e., 20% or 50%) rather than by the concept of control as used in some other jurisdictions.

Japan does not adopt a “change of control” test as the trigger for merger control. However, the acquisition of voting shares exceeding 20% or 50% may be caught even if the acquisition is only temporary. For example, where an acquirer disposes of the voting shares on the same day as the acquisition, the transaction may still be subject to merger control if the relevant thresholds are met.

The following types of transaction are subject to merger control:

• acquisitions of shares;
• statutory mergers and demergers; and
• acquisitions of businesses or assets.

Share acquisitions are subject to merger control where voting shares exceeding 20% or 50% are acquired. In assessing the thresholds, voting rights must be aggregated on a group-wide basis on the acquirer side across entities under the control of the same ultimate parent company. In the case of a 100% acquisition, separate filings are not required for crossing the 20% and 50% thresholds. However, if an initial transaction results in the acquisition of more than 20% but less than 50% of the voting rights, and a subsequent transaction increases the holding to exceed 50%, separate filings may be required for each threshold crossing. The acquisition of options, warrants or convertible debt are not subject to merger control unless and until such instruments are exercised or converted into shares, resulting in the acquisition of voting rights above the thresholds.

A statutory merger is a form of corporate reorganization carried out in accordance with procedures prescribed by the Companies Act, under which two or more companies are combined into a single entity by operation of law. Another form of statutory reorganization under the Companies Act that is subject to merger control is a corporate split (kaisha bunkatsu), by which a company transfers all or part of its business to another company by operation of law. There are two types: joint-incorporation corporate split (kyōdō shinsetsu bunkatsu) and absorption-type corporate split (kyūshū bunkatsu).

• A joint-incorporation corporate split is a statutory reorganization in which two or more companies jointly transfer all or part of their businesses to a newly incorporated company, with the transfers taking effect by operation of law.
• An absorption-type corporate split is a statutory reorganization in which a company transfers all or part of its business to an existing company, with the transfer taking effect by operation of law.

Another form of statutory reorganization under the Companies Act is a joint share transfer (kyōdō kabushiki iten), by which two or more companies jointly establish a new holding company and transfer all of their shares to it, thereby becoming wholly owned subsidiaries of the newly incorporated parent by operation of law.

Acquisitions of businesses or assets are subject to merger control where the whole or a substantial part of the business or fixed assets of another company is acquired. A “substantial part” generally refers to cases where the turnover attributable to the transferred business exceeds 5% of the transferring company’s total turnover, or where such turnover exceeds JPY 100 million. A “business” is understood as a going concern. Fixed assets may be tangible or intangible and include, among others, real estate, machinery and equipment, vehicles, goodwill, and patent rights, provided that they are used on an ongoing basis in the course of business.

There are no special rules for joint ventures; they are subject to merger control if they involve any of the transaction structures described above. For example, joint ventures are caught where the transaction involves the acquisition of shares in an entity established by one of the parties, with the other party acquiring such shares, or where the joint venture acquires businesses or assets from the parties establishing it.

There are no additional requirements, such as a “full functionality” test as applied in Europe.

In the case of (a) a sequence of transactions between the same parties, each step must be examined to determine whether it triggers a notification obligation. For example, where a transaction involves a merger between newly incorporated acquisition vehicles, a merger notification obligation may arise, and at the same time the parent company of one of the merging entities may trigger a share acquisition notification obligation if it acquires shares in the other merging entity as a result of the merger. Where there are multiple share acquisitions between the same parties, the JFTC typically assesses whether such transactions form part of a single transaction requiring only one filing, or constitute separate transactions requiring two filings as the 20% or 50% thresholds are crossed separately.

In the case of (b) a set of interrelated transactions between different parties, the analysis depends on the specific circumstances. For example, separate share acquisition filings are necessary where the target companies are different, even if the acquirer is the same. In case of mergers or demergers, a single filing may cover multiple companies contributing their businesses.

The turnover thresholds for different type of transactions are as follows. Note that “corporate group” refers to a group of entities under the control of the same ultimate parent company.

Domestic turnover refers to turnover from the sale of goods or services delivered within Japan, as well as goods or services imported into Japan. It should be aggregated on “corporate group” basis, unless otherwise specified. For example, in the case of share acquisitions, aggregation is required on the acquirer side but not on the target side, as the legislation provides that only the turnover of the target and its subsidiaries (and not of its parent, the seller) should be included.

When determining the scope of a “corporate group” (i.e., group of entities under the control of the same ultimate parent company), control is deemed to exist where an entity has the ability to influence the decision over financial and business policies of another entity. Control is presumed where an entity holds more than 50% of the voting rights in another entity. Where the shareholding is 50% or less, but exceeds 40%, the analysis turns on additional factors, such as the right to appoint a majority of the members of the board of directors (or an equivalent body) and other similar considerations. See Article 2-9 of the Rules on Applications for Approval, Reporting, Notification, etc. Pursuant to the Provisions of Articles 9 to 16 of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade.

In the case of a joint venture, there are no special allocation rules; 100% of the joint venture’s domestic turnover should be attributed to the corporate group to which its ultimate parent company belongs.

The relevant timeframe for turnover is the most recent fiscal year preceding the filing. There are no special rules for calculating turnover for particular sectors, such as financial institutions.

Japan does not adopt assets-based thresholds.

In principle, the parties should use the same exchange rate applied in the preparation of the financial statements, if any, when converting amounts into Japanese yen. If no such exchange rate was used, the parties should instead use the average exchange rate for the relevant period, based on rates published by major banks (e.g., www.murc-kawasesouba.jp/fx/year_average.php).

Japan does not adopt market share, share of supply or similar thresholds.

There is no local nexus test or exemption for foreign-to-foreign transactions. The applicable turnover thresholds already take into account whether more than one party to the transaction (including the target in case of share acquisitions) have domestic sales in or into Japan. Accordingly, any transaction that meets these thresholds will trigger a notification obligation, regardless of whether it raises substantive competition issues in Japan.

There are exemptions for intra-group restructurings. For example, mergers between companies within the same corporate group are exempt from the notification obligation. Similarly, share acquisitions are exempt where both the acquirer and the target belong to the same corporate group.

There are no de minimis exemptions or safe harbors based on market share or similar criteria for the purposes of the notification obligation.

The JFTC has the power to call in a deal that should have, but has not, been notified.

The JFTC has the power to call in a “below-threshold” transaction.

For certain transactions, the JFTC recommends that the parties submit a voluntary notification even if the domestic turnover of the relevant parties falls below the applicable thresholds (section 6 (2) of the JFTC’s Policies Concerning Procedures of Review of Business Combination, as amended in December 2019).

Such transactions are:

• the value of the transaction exceeds JPY 40 billion; and
• the transaction has a local nexus of either:
  • the target having a business or research and development base located in Japan;
  • the target having sales activities targeting domestic consumers by way of having websites in Japanese or using marketing materials in Japanese; or
  • the target having domestic sales exceeding JPY 100 million.

The JFTC has exercised such call-in power to review below-threshold transactions in cases such as M3/Nihon Ultmarc (2019) and Google/Fitbit (2021).

There is no longstop date for review of a merger and/or for the use of any call-in powers.

For transactions below the thresholds, parties may voluntarily submit a quasi-filing and consult with the JFTC to obtain its views.

The JFTC recommends submitting a voluntary notification for certain transactions that do not meet the relevant turnover thresholds; please see Question 3.9, above.

Notification is mandatory where the applicable jurisdictional thresholds are met and cannot be waived.

There is a standstill obligation for transactions that meet the applicable jurisdictional thresholds.

Regardless of whether a notification obligation exists, the JFTC may seek an emergency restraining order from the court where there is an urgent need to prevent the risk of a substantial restraint of competition from materializing (Article 70-4, AMA). If the merger has already been completed, the JFTC may seek to nullify the transaction through court proceedings where the transaction may result in a substantial restraint of competition (Article 18, AMA).

The JFTC does not have the authority to waive the standstill obligation or to permit carve-out of Japan to allow other parts of the transaction to close.

The acquiring entity, in the case of share acquisitions and business or assets acquisitions, and the merging parties, in the case of mergers or demergers, are responsible for submitting the notification.

There is no filing fee.

The JFTC requires a draft transaction agreement when accepting a notification. The deal does not need to be signed, but principal terms — such as the parties, transaction steps, and the scope of business subject to the transaction — need to be settled.

Notification must be made prior to implementing the transaction, and a standstill obligation applies during the 30-calendar-day waiting period.

There is no deadline for filing following signing of the deal.

The notification rules require the use of prescribed forms. They can be found at: www.jftc.go.jp/dk/kiketsu/kigyoketsugo/yousiki.html.

The forms require information and documents, including: the transaction outline (purpose, structure, and timing); details of the parties and their corporate groups (including domestic sales calculations); and market information for the relevant products and services.

The parties must follow the prescribed notification forms described in Question 4.8, above, and the notification must be submitted in Japanese.

The parties must also attach certain documents, such as a power of attorney, a copy of the agreement (or a document evidencing the decision), financial statements and, for certain transactions, relevant corporate approvals where applicable. Relevant sections of these documents must be translated into Japanese and submitted accordingly. Neither notarization nor apostille is required.

There is no separate simplified procedure; however, the parties may apply for a shortened waiting period in non-problematic cases. Although this is subject to the JFTC’s discretion, such requests are commonly granted in practice.

Pre-notification consultation is not legally mandatory but is common and widely used in practice, particularly in relation to reviewing draft notifications and discussing market definition and information requirements.

There is no fixed consultation period; the timing depends on the complexity of the case and the parties’ responsiveness. For straightforward cases, it typically takes a few weeks. The process usually begins with the submission of a draft notification and explanatory materials, especially regarding the relevant products, market definition, and market conditions. It is also common to discuss the target closing date of the transaction and the JFTC’s review schedule.

There are two review phases: Phase I and Phase II. The Phase I review period is 30 calendar days from the JFTC’s receipt of the notification. The Phase II review period is the later of 120 calendar days from the JFTC’s receipt of the notification, or 90 calendar days from the JFTC’s receipt of all additional information and materials requested at the end of the Phase I. There is no formal mechanism for the JFTC to extend or suspend these periods. If the JFTC cannot reach a clearance decision within Phase I, it will formally request additional reports, information, and/or materials, thereby initiating Phase II. If the parties wish to avoid entering Phase II, a “pull-and-refile” strategy may be an option.

Official holidays and non-working days do not affect the statutory waiting period. However, the JFTC’s review tends to procced more slowly during holiday periods.

For a straightforward case, preparing a draft filing typically takes about two to three weeks. In addition, pre-notification consultation with the JFTC usually takes a few weeks. After the filing is formally accepted, the statutory Phase I review period is 30 calendar days, although it is often shortened in non-problematic cases. Many transactions are cleared during Phase I.

There are no special rules for public offers. Even where public offer is involved, the parties must comply with the deadlines described in Questions 4.12 to 4.14, above.

When initiating a Phase II review, the JFTC publicly announces the case and invites third parties to submit their views.

During the review process, the JFTC conducts inquiries and hearings with third parties, as appropriate, and tends to actively engage with individual suppliers, customers, and competitors.

It is not uncommon for complainants to bring a non-notified merger to the JFTC’s attention.

The JFTC has the authority to request a wide range of information and materials, including internal documents, on a mandatory basis to the extent relevant to its review, although in practice it usually requests the parties to submit such information and materials on a voluntary basis.

The JFTC tends to request various internal documents; in particular, where a case raises substantive competition concerns or where it seeks to examine the purpose or intent of the transaction.

Before publishing case summaries in its annual merger control report or during the process of third-party inquiries, the JFTC normally consults the parties to confirm whether draft disclosures contain confidential information. Where necessary, it then redacts, anonymizes, or generalizes sensitive details.

The substantive test under the Antimonopoly Act, as elaborated in the Guidelines, is whether the business combination would substantially restrain competition in any particular field of trade. If the JFTC identifies concerns under this standard in Phase I, it will request additional information and materials from the parties and proceed to a more detailed investigation in Phase II.

There is no legal framework where “public interest” (non-competition) factors are taken into account in the JFTC’s review.

The Guidelines include “efficiency” considerations as part of the overall competitive assessment framework (i.e., the JFTC assesses whether competition concerns are mitigated by factors including efficiencies).

In practice, the JFTC is generally skeptical to “efficiency” arguments by the parties and rarely concludes that efficiencies outweigh competition concerns.

The JFTC officials often communicate their concerns in meetings during the course of the review, typically at a later stage. They rarely share their preliminary views in writing.

Before issuing an administrative order to block a transaction, the JFTC must hold a formal hearing at which the parties can present their arguments and evidence. In practice, however, parties typically agree on remedies or withdraw the transaction before reaching that stage.

Remedies may be proposed at any time during the review period. The JFTC may clear a transaction that would otherwise raise concerns if the parties commit to appropriate measures.

In practice, the parties typically propose remedies after the JFTC has indicated its concerns, usually at a later stage of the review. Subsequent discussions are conducted informally, either orally or in writing, as appropriate. Once the JFTC and the parties reach agreement on the remedies, the parties formally submit a written submission on remedies, which is attached to the notification.

According to the Guidelines, the remedies should, in principle, be structural measures (e.g. divestitures or reduction in voting rights), aimed at restoring competition lost as a result of the transaction.

In practice, however, the JFTC also accepts behavioral remedies (e.g., separation of sales functions or ring-fencing arrangement), depending on the circumstances.

The JFTC has the authority to order or seek divestiture even after a transaction has been completed, although it rarely exercises this power.

The JFTC clears a transaction subject to the parties’ implementation of the committed remedies. If the parties fail to comply, the JFTC may revoke its clearance and issue an administrative order requiring implementation of the remedies or otherwise prohibit the transaction.

The JFTC typically requires periodic reports on the implementation of remedies or appoints a trustee to monitor compliance.

Upon acceptance, the JFTC issues a written acknowledgment of receipt of the notification to the notifying party.

If the JFTC decides not to issue a cease-and-desist order, it issues a clearance notice to the notifying party.

Upon its clearance, the JFTC publishes the outcome of its review on its website for Phase II cases and other cases it considers high-profile.

The JFTC also publishes annual summaries of major cases and year-by-year results to enhance transparency and predictability.

Clearance decisions take effect immediately if the standstill waiting period (30 calendar days) has already expired or been shortened.

The JFTC’s merger review focuses on whether the business combination itself may substantially restrain competition, and its clearance does not automatically extend to ancillary restraints.

In practice, however, the JFTC is unlikely to challenge such restraints if the parties have raised them during the review and the JFTC has granted clearance after taking them into account.

Third parties with a significant interest may be able to appeal a clearance decision to the Tokyo District Court by filing an administrative revocation action under the Administrative Case Litigation Act within six months from the date when they become aware of the clearance, although there is no judicial precedent in the merger control context.

Failure to notify a notifiable transaction can result in criminal fines up to JPY 2 million under AMA Article 91-2, although there is no case where actual penalties were imposed. Individuals are also subject to such penalties. Such fine may be imposed regardless of the fact that a transaction has not resulted in a substantial restraint of competition.

The JFTC may also seek to nullify the transaction through court proceedings where the transaction may result in a substantial restraint of competition (Article 18).

Standstill violations can result in criminal fines up to JPY 2 million under AMA Article 91-2, although there is no case where actual penalties were imposed. Individuals are also subject to such penalties. Further, the JFTC has the authority to order remedial measures for substantive violations.

Filing with false information can result in criminal fines up to JPY 2 million under AMA Article 91-2, although there is no case where actual penalties were imposed. Individuals are also subject to such penalties.