Press Release

報道資料

For immediate release
ACCJ and the EBC Voice Concerns about Reports ofDeveloping Keidanren Policy on Limiting Triangular Mergers
October 27, 2006 --- The American Chamber of Commerce in Japan (ACCJ)
and the European Business Council (EBC) expressed concern today at recent
reports by Reuters and the Yomiuri Newspaper that leaders of the Keidanren
requested Diet members to create rules requiring foreign companies – eventhose already listed on major foreign exchanges – to list their shares onJapanese exchanges before being allowed to conclude triangular mergers withpublic Japanese companies.
“As strong supporters of Japan’s economic growth and commitment to reaching
greater levels of international competitiveness,” ACCJ President Charles Lakesaid, “both the ACCJ and the EBC are surprised that a senior delegation from aleading business organization would reportedly take a stance that would
largely hinder foreign direct investment (FDI) into Japan, potentiallyendangering Japan’s growth trend and ultimately hurting its long-term global
competitiveness.”
The Government of Japan has set a target of doubling Japan’s cumulative baseof FDI by 2010. With FDI recognized globally as a key driver of economic
growth and M&A transactions accounting for more than half of net increases toJapan’s FDI base, leaders of both the ACCJ and the EBC are concerned that
impractical restrictions on triangular mergers – a “friendly” type of transaction- would be inconsistent with the government’s FDI goals.
“The Government of Japan’s commitment to increasing inward FDI is a smart
policy to ensure continuing growth by Japan’s economy,” said EBC Chairman
Richard Collasse. “However, instituting rules requiring foreign companies
already listed elsewhere to also list on Japanese exchanges to become eligible
for triangular mergers with public firms is not the most practical means ofmeeting its goal of doubling Japan’s FDI base. Frankly, it is hard tounderstand why the leadership of any business organization with Japan’s bestinterests in mind would even suggest such a measure.”

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報道資料

FDI and Triangular Mergers Fact Sheet•

In 2005, FDI flows into Japan slumped to their lowest point since 1996,
declining 64% year-on-year from 2004. It appears almost certain that theGovernment of Japan’s first five-year target to double the cumulative baseof FDI in the period from 2001-2006 will not be reached.1•At the end of 2005, Japan’s cumulative base of FDI amounted to only 2.2%of GDP, as compared with 14.3% for China, 37.1% for the U.K., 13.0% for
the U.S., 33.5% for the European Union, 21.4% for all developed
economies, and 22.7% for the entire world.2•

A triangular merger is a “friendly” structure whereby a company (foreignor domestic) can issue its own shares as consideration in a merger with aJapanese company. Prior shareholders of the Japanese company will
receive the newly issued shares in an effective “swap”.

•Since only about 30 foreign companies are currently listed on Japanesestock exchanges, the result of such a proposal would be that initially only
these 30 firms could realistically propose transactions to public Japanesecompanies. Because of obstacles to listing on Japanese exchanges thatcan make the process costly and time-consuming when compared tointernational standards, the number of foreign listings has been in decline
since the 1990s.

•A triangular merger cannot be used for a hostile takeover because by law,
Japanese boards must negotiate detailed terms and approve thetransaction and the merger agreement before it goes to shareholders fortheir final approval.

•If Japanese boards want their shareholders to receive shares that are listed
in Japan, this condition can be demanded in negotiations. If agreement on
this condition is not reached, the boards can refuse the deal. Japaneseboards cannot be forced to accept a transaction they do not agree with.

1

UNCTAD report: World Investment Report 2006,
http://www.unctad.org/Templates/webflyer.asp?docid=7431&intItemID=2068&lang=1&mode=downloads
2Ibid

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About the ACCJ
The mission of the American Chamber of Commerce in Japan (ACCJ) is to further
the development of commerce between the United States of America and Japan,
promote the interests of U.S. companies and members, and improve theinternational business environment in Japan. Established in 1948 byrepresentatives of 40 American firms, the ACCJ has grown into one of the mostinfluential business organizations in Japan, with close to 3,000 individual members
representing more than forty countries and 1,400 companies.
About the EBC
The European Business Council (EBC) is the trade policy arm of the 17 European
national chambers of commerce and business associations in Japan. Established in1972, the EBC works to improve the trade and investment environment for
European companies in Japan. The EBC currently represents around 3,000 local
European companies and individuals who are members of their national chambersof commerce. More than 350 of these companies participate directly in the EBC’s
29 sector-based committees.
PRESS CONTACT: ACCJ Media Relations Officer Mina Takahashi (tel: 3433 6542; email:mtakahashi@accj.or.jp) or EBC Policy Director Jakob Edberg (tel: 3263-6224; email:edberg@ebc-jp.com).

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