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Introduction Our firm has had the privilege of representing overseas companies for over 40 years in establishing Japanese operations, through subsidiaries, branch offices, joint venture companies, and through mergers, acquisitions and other types of business transfer structures. Our clientele includes companies from the United States and North America, Europe, Australia and many other countries from around the world. |
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Basic Approaches to Entering the Japanese Market We have seen several basic approaches for overseas companies to enter the Japanese market. The first approach is to do so independently by first opening a representative office in Japan. However, this form is not recommended for an overseas company that wishes to conduct significant business in Japan, since the representative office’s activities are limited essentially to information gathering and the office is not permitted to engage in business in Japan. If an overseas company wishes to conduct significant Japan business, then it can establish either a Japan branch office or a Japan subsidiary. The Japan subsidiary is generally more popular, since subsidiaries, as opposed to branches, generally signify to the market a more permanent commitment to doing business in Japan. Developing Japanese business independently and “organically” is a process that can take substantial time since the overseas company, although having a solid reputation overseas, is relatively new in Japan and would need to build its market share by itself. The Japanese market is large and already highly competitive with many international players having entered the market years ago and developed their own distribution channels for their products. If an overseas company wishes to accelerate its penetration in the Japanese market, it may consider doing so by utilising a pre-existing personnel and distribution network in Japan, and acquiring knowledge of the Japanese market through a joint venture or M&A transaction. If an overseas company has established a Japanese company, it can, rather than seeking to penetrate the Japanese market from the “ground floor,” take immediate advantage of the market share of the Japanese partner or target. In turn, Japanese partners often wish to take advantage of the innovative products and expertise developed by overseas companies, so that they can distinguish themselves in the Japanese market from purely domestic firms. Naturally, M&A in Japan, like everywhere else, introduces such issues and concerns such as risk analysis and due diligence, personnel restructuring, and compatibility of “corporate cultures.” However, for an overseas company that wishes to enter and gain market share in Japan quickly, M&A can be a feasible, indeed, preferred, approach. In addition to the above, a number of overseas firms have entered into contractual business tie-ups or collaborations, often involving an agreement by the Japanese partner to market and sell in Japan the products of the overseas firm, and we have assisted a number of clients with this type of arrangement. |
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Establishing and Maintaining Business Operations in Japan/General Corporate Matters Our firm has over 40 years of experience in advising non-Japanese overseas companies in regard to general corporate matters such as establishing a business presence in Japan as described above, and the conduct of shareholders’ meetings and other shareholder issues, the conduct of board meetings and related issues of board member responsibility and fiduciary duties, the issuance of stock, stock options and other equity transactions, and conversely frequently advise clients in regard to insolvency, restructuring, de-mergers, and divestitures or the split and/or sale of corporate divisions and/or business lines, and the winding-down of Japanese operations of overseas enterprises. |
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Cross-border and domestic M&A Cross-border mergers and acquisitions in Japan have increased in recent years, and a newly active domestic M&A market is of increasing importance. With the capability and capacity to handle large international transactions involving sophisticated due diligence, drafting and negotiation aspects, our firm has represented clients in a substantial number of large and complex international M&A projects that have occurred in Japan in recent years. Our firm has experience in being involved in M&A transactions from the very beginning of the undertaking, advising on the deal structure independently or in conjunction with overseas counsel for both corporate and equity fund acquirers as well as for acquisition targets, participating in early and late-stage negotiations on behalf of our clients, undertaking or supervising due diligence projects, and obtaining necessary regulatory approvals or performing required government filings, including undertaking discussion and negotiations with relevant government agencies, as is often required. |
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Joint Ventures Many overseas companies, in addition to domestic entities, seek increased exposure to the Japanese market through the vehicle of a joint venture enterprise, finding that combining their experience with that of a partner company can provide unique positive synergies to achieve their goals, while lessening the individual risk to each party. To effectively negotiate and craft the structure for a successful joint venture enterprise requires experienced and efficient legal counsel, who are familiar with the potential pitfalls inherent in such arrangements. The attorneys of our firm have extensive experience in various forms of joint venture arrangements in Japan, and have advised clients in many fields in regard to the preliminary negotiations, structuring, and continuing operations issues inherent to a joint venture, as well as in regard to the expansion, sale or purchase of a share or winding-down of a joint venture operation in Japan. |
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Corporate Takeover Practice Anderson Mori & Tomotsune attorneys have experience advising on various forms of corporate takeovers, including management buy-outs, leveraged buy-outs, and tender offer bids (TOBs). |
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Nationalization/Privatization Anderson Mori & Tomotsune attorneys have advised on significant privatization undertakings. Our noteworthy projects have been our work in relation to the privatizations of the Nippon Telegraph and Telephone Corporation (1985) and Electric Power Development Co., Ltd. (2004), and Ripplewood’s acquisition of the former Long Term Credit Bank of Japan (LTCB), and our ongoing representation of the new banking entity. |
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Antitrust Aspects of Corporate and M&A Transactions With a broadly experienced antitrust practice featuring one of the foremost antitrust practitioners in Japan, Mr. Hideto Ishida is well placed to advise on the antitrust aspects of corporate and M&A transactions. With consolidation taking place in a number of fields in Japan, and with the consolidation of multinational firms having an ever-greater reach, more and more transactions require concise analysis of potential antitrust implications. Particularly in light of the increasing scope of the Japanese antitrust laws, those undertaking M&A transactions involving Japanese business increasingly require experienced antitrust advisors to take part in transactional analysis. Anderson Mori & Tomotsune prides itself on its competencies in this area. |
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M&A-Related Labor and Employment Issues We also regularly advise clients in regard to labor and employment issues arising in the course of mergers and acquisitions, business transfers, corporate splits and other restructurings. We also provide advice on other transactional matters, including in regard to labor issues planning, performing labor and employment due diligence, advising regarding statutory requirements, employee reductions, union issues and negotiation, management-employee communications and the labor risks inherent to transactional issues. |
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Representative Transactions Our firm has represented a large number of the world’s foremost companies in complex and large M&A transactions involving both listed and non-listed Japanese companies in Japan. Should you wish further details on our specific experience, please contact us. |
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Due Diligence Capability Our firm is accustomed to dealing with legal due diligence projects, both large and small. As an example of a typical DD project, our firm was engaged by a Japanese entity which is divesting approximately 30-40 separate businesses that are major entities in a global industry in an auction process. For this project, we assigned approximately 10 senior Japanese associates, 10 junior Japanese associates, and 10 native English speaking lawyers and legal professionals, who were supervised by three partners. Through this team structure, we were able to efficiently review voluminous documentation in both English and Japanese, and promptly prepare and deliver due diligence reports and other offering materials in both languages. |
