LEGAL UPDATE | No. 32
Legal analysis as of October 7, 2026 | Corrected October 20, 2026
SAKURA Law Office | Managing Partner Kenshiro Michishita
SAKURA Law Office has published the thirty-second edition of the Legal Update series by Managing Partner Kenshiro Michishita, addressing Japanese merger control under the Antimonopoly Act and its practical integration into domestic and cross-border M&A. Merger review is not a filing exercise that begins after a signing ceremony. It can determine whether a transaction is executable, when it can close, whether the buyer will receive the business it priced, how financing commitments should be timed, what information may be shared before closing and whether the parties may ultimately be required to divest assets or accept other remedies. For strategic acquisitions, industry consolidation, sizeable private equity transactions and multi-jurisdictional deals, competition analysis should therefore begin while the transaction itself is still being designed.
Chapter IV of Japan's Antimonopoly Act regulates share acquisitions, mergers, company splits, joint share transfers and acquisitions of businesses and other assets where the transaction may substantially restrain competition in a particular field of trade. Transactions meeting the applicable size and structural thresholds are subject to prior notification to the Japan Fair Trade Commission (JFTC) and, as a general rule, a 30-day waiting period. But filing thresholds and substantive legality are different questions. The JFTC may review a transaction even if no statutory notification is required. The Japanese-language Policies Concerning Procedures of Review of Business Combination, revised on February 2, 2026, expressly identify circumstances in which consultation with the JFTC is desirable for large, non-notifiable acquisitions with a sufficient Japanese nexus. [1] [3]
The regulatory framework is also in transition. On July 17, 2026, the JFTC published a draft revision of its Guidelines to Application of the Antimonopoly Act Concerning Review of Business Combination. The draft would expressly recognise, among other matters, improvements in security of supply, environmental performance and the creation of new products through expanded investment and innovation as potentially pro-competitive effects where they result from transaction-specific efficiencies. It would also make clearer that longer-term market conditions may be considered when assessing import pressure, entry, competitive pressure from adjacent markets or customers, efficiencies, financial conditions and market contraction. As of October 7, 2026, however, these proposals remain a draft: the public-comment period closed on August 31, 2026, while the JFTC continues to identify the December 17, 2019 version as the current Business Combination Guidelines. Current law and practice must therefore be distinguished carefully from the direction of reform. [7]
This Update analyses Japanese merger control as of October 7, 2026 by connecting filing analysis, substantive competition review, competition-law due diligence, internal-document strategy, economic evidence, remedies, transaction agreements and global regulatory coordination. It draws on the Antimonopoly Act, the current Business Combination Guidelines, the JFTC's procedural policies, the 2025 Merger Review Guidebook, the 2026 draft revision, recent published cases and JFTC materials on internal documents and economic analysis. The objective is not to present a list of thresholds, but to explain how boards, General Counsel, sponsors, deal teams and overseas counsel should integrate merger control into the commercial architecture of an M&A transaction.
Executive Summary
The first merger-control question in an M&A transaction should not be limited to whether a filing threshold is crossed. Japanese notification rules use domestic turnover and, for share acquisitions, post-acquisition voting-right thresholds, but a transaction that is not notifiable may still be reviewed if it can affect competition in Japan. This distinction is particularly important for acquisitions of technology, data, intellectual property, research-and-development pipelines and high-value start-ups whose current Japanese turnover may understate their competitive significance. For large non-notifiable acquisitions, the JFTC's procedural framework may make voluntary consultation advisable where the transaction value and Japanese nexus are substantial.
A notifiable transaction generally may not close for 30 days after acceptance of the filing. Where the JFTC makes the statutory request for reports and the matter enters secondary review, the deadline for prescribed notifications is generally the later of 120 days from acceptance and 90 days from receipt of all requested reports. This is neither a clock triggered by every routine question nor the deadline for a final cease-and-desist order or contractual closing. Pre-notification consultation, data collection, business-team verification and coordination with other authorities can require additional time. The SPA should address review completion, filing cooperation, control of agency engagement, remedy commitments, the long-stop date, termination and competitively sensitive information. [3]
Substantive review is not a mechanical exercise based on market shares or the Herfindahl-Hirschman Index (HHI). The JFTC considers market definition, closeness of competition, capacity constraints, imports, entry, buyer power, competitive pressure from adjacent products or markets, data and intellectual property, research-and-development capability, potential competition, efficiencies and other evidence. The 2026 draft Guidelines would make the treatment of security of supply, environmental performance, investment, innovation, new-product creation and longer-term market change more explicit. They do not create a general public-interest exemption for an otherwise anticompetitive transaction. The claimed benefit must still be connected to competition and supported by transaction-specific, credible evidence.
Contemporary practice emphasises internal documents, customer and competitor evidence, economic analysis and effective remedies. In its FY2025 report, the JFTC recorded 458 notifications: 449 were cleared in primary review, eight were withdrawn and one proceeded to secondary review. Separately, reviews of fifteen non-notifiable transactions were completed. Five matters completed during the fiscal year were cleared on the basis of remedies. These categories have different populations and should not be added indiscriminately to calculate a clearance rate. For companies, competition diligence, deal value, the SPA, board decisions, integration planning and foreign regulatory work should therefore be managed together. [8]
1. Merger control begins with transaction design, not filing thresholds
The most common analytical mistake at the beginning of a Japanese M&A process is to reduce merger control to a turnover-threshold checklist. Chapter IV of the Antimonopoly Act is concerned with the competitive effect of a business combination: whether shareholding, a merger, a company split, a joint share transfer, an acquisition of a business or another form of integration forms, maintains or strengthens a relationship through which the parties operate in a united manner and may substantially restrain competition in a particular field of trade. A statutory filing requirement is therefore a procedural gateway, not the substantive test.
That distinction has become especially important in acquisitions involving software, AI, semiconductors, life sciences and other R&D-intensive businesses. A target may have modest current Japanese revenue while controlling technology, data, intellectual property, an important development pipeline, network effects or a credible path to future entry. The current Business Combination Guidelines state that the JFTC may assess the competitive effect of a transaction regardless of whether the transaction is subject to the statutory notification regime. The current Japanese-language procedural policy also states that consultation is desirable for acquisitions that are not notifiable because the target-side domestic-turnover or related notification criteria are not met, where the total acquisition consideration is expected to exceed JPY 40 billion and the target has a material Japanese nexus, for example through business or R&D facilities in Japan, sales activities directed to Japanese customers or aggregate domestic turnover exceeding JPY 100 million. This is not itself a filing obligation, but it makes clear why 'below threshold' cannot be treated as synonymous with 'outside merger control.' [3]
For a buyer, the competition analysis should therefore start around the LOI or heads-of-terms stage. The transaction team should identify horizontal overlaps, vertical supplier-customer relationships and conglomerate or ecosystem links involving complementary products, platforms, data, APIs, distribution channels or intellectual property, and then map the jurisdictions in which review may be required. A seller must make a different but related assessment: a bidder offering the highest headline price may not be the bidder most capable of closing. In an auction, deal certainty requires comparing the expected duration of review, the likelihood and economic cost of remedies, the risk that different regulators will proceed on different timetables, and the purchaser's ability and willingness to bear those risks.
Boards and investment committees should similarly avoid treating merger review as a filing task owned solely by the legal department. Competition risk can affect the purchase price, the amount and timing of synergies, financing commitments, the feasibility of integration, the value destroyed by a potential divestiture and the probability of termination. At transaction approval, decision-makers should understand which competitive theories matter, in which markets and jurisdictions they may arise, and whether the transaction remains economically rational if a regulator requires a material remedy.
2. Filing thresholds and review timing must be translated into the deal timetable
Japan's prior-notification regime is structured by transaction type. For a share acquisition, a filing is generally required where the acquiring company's combined business group has aggregate domestic turnover exceeding JPY 20 billion, the target company and its subsidiaries have aggregate domestic turnover exceeding JPY 5 billion, and the acquiring group's post-transaction voting-right ratio newly exceeds 20% or 50%. For mergers, the core thresholds compare the combined-business groups to which the parties belong: one must exceed JPY 20 billion in aggregate domestic turnover and another JPY 5 billion, subject to applicable exceptions including specified intra-group transactions. Company splits, joint share transfers and business acquisitions have their own statutory criteria. Changing legal form does not therefore provide a universal route around merger review. Foreign-to-foreign transactions can also be notifiable where the Japanese domestic-turnover and other applicable tests are met. [4] [5]
The transaction generally cannot be implemented until 30 days have elapsed from acceptance, unless the JFTC shortens the waiting period under the applicable conditions. Secondary review is triggered by the formal statutory request for reports—for a share acquisition, under Article 10(9)—rather than every question raised in consultation or primary review. The relevant deadline is the later of 120 days from filing acceptance and 90 days from receipt of all reports, by which the JFTC issues the prescribed no-order, commitment-procedure or hearing notification, as applicable. That notification deadline is distinct from the initial standstill; any proposed implementation while review continues must also be assessed against substantive law and contractual conditions. Prime Polymer’s absorption-type company split involving Sumitomo Chemical’s polypropylene and related business, notified in November 2025, proceeded to secondary review before a no-issue decision on April 24, 2026. Secondary review is therefore not itself a prediction that the transaction will be prohibited. [3] [13]
The statutory clock is only part of the schedule. Preparing a filing can require market definition, turnover and share data, customer and supplier information, competitor mapping, transaction rationale and detailed business records from Japanese and overseas teams. The JFTC accepts pre-notification consultations, which can be used to discuss the transaction, identify issues and prepare the necessary evidentiary record. Pre-notification consultation is not a mechanism for obtaining a binding clearance before filing. Its practical value is to expose difficult issues earlier and improve the quality and efficiency of the formal review.
An SPA therefore needs more than a condition precedent stating that competition clearance must be obtained. It should allocate responsibility for filings and regulator communications, consultation and consent rights between buyer and seller, the level of efforts the buyer must use, the extent to which the buyer must accept divestitures, access obligations, information barriers or other remedies, any materiality or business-value limitations, and the long-stop date and termination consequences. For private equity sponsors and strategic buyers with significant existing portfolios, the remedy analysis may need to include businesses outside the target itself. The commercial ceiling on what the buyer is prepared to sacrifice for approval should be identified before signing, not after a regulator proposes a remedy.
3. Market definition and competitive assessment: market shares are a starting point, not the conclusion
The substantive core of merger review is to define the relevant field of trade and determine whether effective competitive constraints will remain after the transaction. The current Guidelines generally begin product-market analysis with demand-side substitutability and, where appropriate, supply-side substitutability. Geographic markets are assessed through customer purchasing patterns, transport costs, supplier locations, pricing and volume evidence and other market facts. A business team may describe its market as 'global' or 'nationwide', but a regulatory market cannot be established by business terminology alone. The question is whether customers can actually switch to the alternative products or suppliers said to constrain the merged firm. [2]
For horizontal combinations, the current Guidelines provide HHI-based safe harbours. In broad terms, a transaction will ordinarily not be regarded as substantially restraining competition where the post-transaction HHI is 1,500 or less; where it is above 1,500 but not more than 2,500 and the HHI increase is 250 or less; or where it is above 2,500 and the increase is 150 or less. These are screening tools, not a binary legality test. Many transactions outside the safe-harbour bands are cleared, while current revenue shares can be an incomplete measure in markets driven by data, innovation, intellectual property, pipelines or future entry. JFTC practice has also used additional indicators, including combinations of concentration and party share, to identify cases with a comparatively low likelihood of concern, but none of these measures replaces the full factual analysis. The Guidelines also explain that past practice generally indicates limited concern where post-merger HHI is no more than 2,500 and the combined share no more than 35%; that additional indicator is not a substitute for examining the particular facts. [2]
Vertical transactions require a different inquiry. If one party controls an important input, component, data set, infrastructure or distribution channel and the other operates downstream, the JFTC may consider whether the integrated firm would have the ability and incentive to foreclose or disadvantage rivals, or whether access to competitively sensitive information could alter competition. Conglomerate or complementary-product transactions can raise issues involving bundling, ecosystems, platforms and the elimination of potential competition. Competition-law due diligence should therefore look beyond product-name overlap and examine supply chains, distribution routes, API and data dependencies, licensing, multi-homing, switching frictions and R&D roadmaps.
The final analysis combines the position of the parties with imports, entry, competition from neighbouring markets, customer bargaining power, the parties' overall business capabilities, efficiencies, financial condition, market size and other evidence. Assertions need to match observed behaviour. If the parties argue that customers can readily switch suppliers, the evidentiary record should address lost bids, alternative suppliers, switching history, transport costs, qualification periods, capacity and required investment. A competition narrative prepared by lawyers after signing is fragile if it cannot survive comparison with the company's own data.
4. Competition due diligence and evidence strategy: internal documents and economics matter
JFTC review does not end with market-share tables. The JFTC's procedural materials identify a wide range of information that may be relevant to market definition and competitive conditions, including board and management materials, analyses of the purpose and effect of the transaction, business plans, strategy documents, market research and emails. Its published practice on internal documents explains that such materials can reveal how the parties themselves viewed rivals, market developments, competitive constraints and the purpose of the transaction. Internal documents can be requested in primary review as well as in secondary review, and preservation obligations should be taken seriously once document collection becomes relevant. Of the eleven principal cases published in the FY2025 compilation, three involved requests for internal documents and two included economic-analysis results, as reported by the JFTC. [3] [8]
Competition-law due diligence should therefore collect the facts that will determine the regulatory case, not merely search for existing antitrust violations. Relevant materials can include revenue by major customer, bidding and quotation history, win-loss data, customer responses to price changes, capacity constraints, input limitations, entry costs, qualification periods, substitute technologies, R&D pipelines and internal assessments of competitive closeness. At the same time, diligence between competitors must be controlled. Future pricing, customer-specific terms, sales strategy, capacity plans and similar competitively sensitive non-public information should not be shared without a demonstrated need and appropriate safeguards. Aggregation, anonymisation, outside-adviser review and clean-team structures can help reconcile deal evaluation with continued competitive independence before closing.
Economic analysis also requires substance, not labels. In the AEON / TSURUHA transaction, the parties submitted quantitative analysis, but the JFTC did not simply accept the results. The authority examined the statistical reliability of the estimates and conducted its own analysis using store-level and other data. The JFTC's separate guidance on economic-analysis submissions encourages standard reporting of measures such as standard errors, p-values and interval estimates, together with the underlying data and methodology needed for review. In a significant transaction, model selection, data quality, sample variation, robustness and economic significance all need to be defensible. [9] [11]
The same point applies to the broader transaction record. Investment committee papers, synergy cases, board materials, business plans and regulatory submissions have different purposes, but they should not tell irreconcilable stories about competition. A buyer that tells its investment committee that the acquisition will remove its closest competitor and weaken price discipline will face a serious credibility problem if it later tells the JFTC that the parties barely compete. Competition counsel should be involved early enough to test the business thesis against the facts, not merely to revise wording after the decision has been made.
5. What the 2026 draft Business Combination Guidelines signal
The draft revision published by the JFTC on July 17, 2026 would be the first major revision of the Business Combination Guidelines since 2019. As of October 7, 2026, the consultation period has closed but the draft has not replaced the current 2019 Guidelines. The analysis in this section therefore concerns the regulatory direction indicated by the published draft, not rules that should already be treated as finally adopted. Parties considering an actual transaction should confirm whether a final revision has been issued and when it applies. [7]
The first major theme is the treatment of security of supply, environmental performance and innovation. The draft would expressly recognise security of supply and environmental performance, including greenhouse-gas reduction, as dimensions on which firms may compete for customers. It would also state that transaction-specific efficiencies that improve or maintain security of supply, enhance environmental performance, or create new products through expanded investment and innovation may be considered as pro-competitive effects. This direction is highly relevant to transactions justified by supply-chain resilience, decarbonisation or R&D investment. But general statements that a transaction is 'good for economic security', 'green' or 'innovative' are unlikely to be sufficient. The parties should identify what the combination will make possible, why the benefit is transaction-specific, whether it is realistically achievable, and how it will affect competition and users, supported by investment plans, capacity constraints, R&D plans, cost evidence and supply data. [7]
The second theme is time horizon. The draft would state more expressly that longer-term market conditions can be considered where, for example, import pressure is expected to become effective at a future point because of foreseeable changes in market structure. A longer horizon would similarly be relevant to entry, competitive pressure from adjacent markets, customer bargaining power, efficiencies including innovation, financial conditions and shrinking markets. That can matter in industries facing population-driven demand contraction, large capital requirements, technological transition or a realistic risk that maintaining several independent operators will become commercially unsustainable. [7]
Third, the draft incorporates lessons from recent cases and international developments. It would add examples addressing situations in which imported products remain competitively significant despite tariffs, where indirect customers exert competitive pressure, and where purchasing markets require competition analysis. This does not narrow merger control. It makes the factual inquiry more multidimensional. Parties may need to prepare evidence not only on sales competition, but also on procurement power, supplier terms, the practical competitiveness of imports and competitive conditions in downstream markets. [7]
The draft should not be read as a statement that international competitiveness, economic security or another public-policy objective can excuse a merger that substantially restrains competition. The statutory test remains competition in a particular field of trade. Supply resilience, environmental performance and innovation matter where they operate as dimensions of competition or transaction-specific efficiencies that produce a cognisable pro-competitive effect. The task for deal teams is therefore not to rename a strategic rationale in antitrust language, but to explain the concrete mechanism by which the transaction changes competition and customer outcomes.
6. Remedies and the SPA: decide in advance what the buyer is prepared to give up for clearance
A transaction that raises a competition concern may still be capable of clearance if the parties offer remedies that effectively address the identified theory of harm. Remedies must correspond to the source of the concern, be capable of implementation and allow their effectiveness to be assessed. Structural measures such as divestiture of a business or assets may be appropriate in some cases. Behavioural measures can include supply or access commitments, information barriers, licensing or other conduct obligations. The appropriate form depends on the market structure and the competitive problem, not on which remedy is easiest for the transaction parties to draft.
The published AEON/TSURUHA review of April 2025 and Toyota Motor/Daimler Truck review involving Hino Motors and Mitsubishi Fuso in February 2026 were cleared on the basis of the parties’ proposed remedies. Five matters completed in FY2025 likewise depended on remedies. These measures are not merely appendices to a submission: they may change the transaction itself and continuing operations. Where monitoring arrangements, including a monitoring trustee, are required, the agreement should address reporting, supervision, corrective action and continuing costs as part of the commercial bargain. [10] [12] [14]
The competition-law provisions of the SPA should reflect this reality. A generic requirement to use 'reasonable efforts' can leave a large gap if the regulator demands a divestiture of part of the target or, in some circumstances, a remedy affecting the buyer's existing business. Sellers generally seek certainty of closing; buyers generally seek to avoid an approval package that destroys the investment thesis. The contract can therefore address quantitative or qualitative remedy caps, protected assets or geographies, limits tied to revenue, EBITDA or enterprise value, the permitted duration of behavioural commitments, and whether the buyer must litigate or pursue other forms of challenge before it can terminate.
Pre-closing covenants require equal care. It is common for a seller to agree to operate in the ordinary course and for a buyer to receive consent rights designed to preserve value. In a transaction between competitors, however, those rights must not give the buyer de facto control over the target's pricing, customers, output, R&D or other competitive decisions before clearance and closing. The parties should also avoid unnecessary sharing of competitively sensitive information. Carefully defined consent rights, information protocols, clean teams and a disciplined boundary between integration planning and operational coordination are essential to protecting both the transaction and the parties' ongoing compliance.
7. Cross-border M&A requires one global merger-control strategy
Large transactions cannot be managed as a series of unrelated national filings. The United States, European Union, United Kingdom, China, Korea and other jurisdictions use different turnover, asset, transaction-value or nexus tests, different filing triggers and waiting periods, different document requirements and different approaches to theories of harm and remedies. A transaction cleared in Japan may still be unable to close because another authority is reviewing it; conversely, a remedy agreed in another jurisdiction can affect Japanese operations, global product supply or the economic model of the acquisition. At the outset, the parties should create a single jurisdictional map identifying every potential filing, the slowest likely review, the jurisdictions with the greatest substantive risk and the factual propositions that must remain consistent across submissions.
The JFTC also cooperates and exchanges information with overseas competition authorities in appropriate matters. In published annual case materials, the authority identifies matters in which such exchanges occurred. The practical response should not be for each local law firm to build a separate factual story. A central deal team should control the core market data, competitor and customer definitions, business plans, efficiency claims and transaction rationale, while local counsel adapts that consistent factual record to the legal tests and procedural requirements of each jurisdiction. This becomes particularly important when management presentations, investor materials and regulatory submissions are prepared in multiple languages and on overlapping timetables.
Boards and investment committees need more than a binary answer that a filing is required or clearance is 'likely'. The decision paper should identify the actual competition theories, the evidence needed to address them, the effect of review on the deal timetable, and the value at risk if a regulator demands a remedy. In a competitive auction, the ability to quantify and contract around regulatory risk can itself improve a bidder's competitiveness by allowing it to offer more credible closing certainty without assuming unlimited obligations.
The purpose of merger control is not the production of a clearance letter as an end in itself. The substantive question is whether effective competition will remain in the market after the transaction, and the parties must be able to support their position with facts, data, economic analysis and, where needed, workable remedies. When competition analysis is integrated from the outset with due diligence, internal-document governance, the SPA, remedy strategy, integration planning and foreign filings, regulatory review becomes part of transaction engineering rather than a defensive process at the end. The direction signalled by the 2026 draft Guidelines makes this integration even more important: future cases are likely to require a richer explanation not only of present shares, but of future market structure and the transaction-specific pathway through which investment, resilience and innovation can enhance competition.
Frequently Asked Questions
Q1. Which M&A transactions require a merger notification to the JFTC?
Prior notification may be required for share acquisitions, mergers, company splits, joint share transfers and business acquisitions when the transaction-specific domestic-turnover and other statutory criteria are met. For share acquisitions, the core thresholds generally include an acquiring combined-business group with domestic turnover above JPY 20 billion, a target group above JPY 5 billion, and a post-acquisition voting-right ratio that newly exceeds 20% or 50%. The criteria differ by transaction structure and should be tested case by case. [4] [5]
Q2. Does acquiring 20% of a Japanese company automatically require a JFTC filing?
No. The voting-right threshold is only one component of the statutory notification test, which also includes the relevant domestic-turnover thresholds. In addition, the 20% and 50% filing thresholds are not identical to the substantive question under the Business Combination Guidelines whether a joint relationship is formed or strengthened. Minority investments can require substantive review depending on shareholding patterns, board representation, business alliances and other relationships.
Q3. If a foreign start-up has little Japanese revenue, can the buyer ignore Japanese merger control?
Not necessarily. A transaction can be reviewed even if it is below the statutory filing thresholds. Under the current Japanese-language procedural policy, consultation with the JFTC may be desirable for an acquisition that is non-notifiable because target-side domestic-turnover or related criteria are not met, where the acquisition value is expected to exceed JPY 40 billion and the target has a sufficient Japanese nexus, such as business or R&D facilities in Japan, sales directed to Japanese customers or aggregate domestic turnover above JPY 100 million. [3]
Q4. Is a notifiable transaction always prohibited from closing for the full 30 days?
The general rule is that a notified transaction may not be implemented for 30 days after the JFTC accepts the filing. The JFTC may shorten the waiting period in appropriate cases, including where the transaction clearly presents no issue and the parties make the required written request. A deal timetable should not, however, assume that early termination will be available. [3]
Q5. Does a Phase II or secondary review mean that the JFTC intends to prohibit the transaction?
No. Secondary review means that the JFTC requires a more detailed evidentiary examination. It is not itself a finding that the transaction is unlawful. The Prime Polymer / Sumitomo Chemical transaction moved to secondary review after the JFTC requested additional reports and materials, but the review was closed in April 2026 after the JFTC concluded that the transaction would not substantially restrain competition in any particular field of trade. [13]
Q6. If the transaction falls within an HHI safe harbour, is clearance automatic?
An HHI safe harbour is an important indication that the transaction would ordinarily not be regarded as substantially restraining competition, but it is not a substitute for case-specific analysis. In markets driven by data, intellectual property, innovation, pipelines, network effects or potential entry, present market shares and concentration measures may not capture the parties' full competitive significance. [2]
Q7. Can competitors exchange customer-level pricing and future plans during M&A due diligence?
Only with great care. The parties need information to value and diligence the transaction, but competitors should not share competitively sensitive non-public information more broadly than necessary. Customer-specific pricing, future pricing, sales strategy, capacity plans and similar information may require aggregation, anonymisation, clean teams or outside-adviser access. The parties remain independent competitors until closing.
Q8. What remedies can be used if the JFTC identifies a competition concern?
Depending on the theory of harm, remedies may include divestiture of a business or assets, supply or access commitments, information barriers, licensing and other behavioural measures. The remedy must be capable of addressing the identified competition concern and of effective implementation. Some published cases use monitoring trustees to supervise compliance. The SPA should specify how much remedy risk the buyer has agreed to bear.
Q9. Are the July 2026 draft Business Combination Guidelines already in force?
No. As of October 7, 2026, the JFTC's July 17 document remains a draft revision. The public-comment period ended on August 31, 2026, while the JFTC continues to list the December 17, 2019 version as the current Business Combination Guidelines. Deal teams should not present the draft as a final rule and should confirm any final revision and effective date at the time of the transaction. [7]
Q10. Would the 2026 draft allow an anticompetitive merger simply because it improves supply security or environmental performance?
No. The draft does not create a general public-interest exemption. It proposes that improvements in security of supply, environmental performance, investment, innovation and new-product creation may be considered as pro-competitive effects where they arise from transaction-specific efficiencies. The parties still need to explain the concrete competitive mechanism, feasibility and customer benefit with credible evidence. [7]
Q11. In a cross-border acquisition, can the parties manage the Japanese merger filing independently from filings elsewhere?
The legal procedures are jurisdiction-specific, but the transaction should be managed globally. Inconsistent market definitions, competitor lists, share data or efficiency narratives can complicate review. The parties should coordinate filing requirements, timing, regulator communications, potential information exchanges, remedies and the SPA long-stop date across jurisdictions from the beginning.
About the Legal Update Series
SAKURA Law Office and Managing Partner Kenshiro Michishita publish the Legal Update series on corporate law, M&A and private equity, financial regulation and capital markets, cross-border transactions, international disputes, corporate crisis management, AI and technology, data protection, Web3 and digital assets, employment, reputation, intellectual property and corporate governance. The series is designed not merely to summarise legislation or regulatory announcements, but to connect legal rules with the decisions that boards, General Counsel, executives, financial institutions, sponsors and overseas counsel must make in transactions, governance and disputes.
For further information, please see the SAKURA Law Office official website, the profile of Managing Partner Kenshiro Michishita and the firm's M&A and Business Succession practice page.
How SAKURA Law Office Can Assist
SAKURA Law Office advises on Japanese and cross-border M&A from the early competition-law screening stage through filing, review, closing and implementation of remedies. The firm can assist with notification analysis, market and competitive-overlap mapping, competition-law due diligence, pre-notification consultation and formal filings with the JFTC, responses to requests for information, coordination with overseas competition counsel, remedy design and the translation of regulatory risk into the transaction agreement and timetable.
For buyers, relevant workstreams can include jurisdictional filing maps, identification of market and customer evidence to obtain in diligence, information-control and clean-team arrangements, regulatory covenants, remedy caps, long-stop dates, conditions precedent and pre-closing integration planning. For sellers, competition risk affects bidder selection and deal certainty as well as price: auction terms, cooperation obligations, the standard of efforts required from a buyer, the extent of remedy commitments and extension or termination mechanics should be designed with the likely review path in mind.
Where the JFTC raises concerns, the response may require reassessment of the theory of competition, collection of customer, competitor, import and entry evidence, economic analysis, regulator engagement, structural or behavioural remedies and post-closing monitoring. The same legal and evidentiary work can affect board and investment committee decision-making, financing and global closing coordination. For multi-jurisdictional transactions, coordination among Japanese counsel, overseas counsel, economists, financial advisers and the business teams is often central to maintaining factual consistency and deal certainty.
Contact
SAKURA Law Office
Ark Hills South Tower 4F, 1-4-5 Roppongi, Minato-ku, Tokyo 106-0032, Japan
Managing Partner Kenshiro Michishita
Official website | Kenshiro Michishita — Profile | Contact form
Principal References
The numbered references in the text correspond to the materials below. Statutes, exchange rules, judgments, administrative guidance and practical recommendations have different legal status.
1. e-Gov Laws | Antimonopoly Act, Act No. 54 of 1947 (Japanese statutory text)
2. JFTC | Business Combination Guidelines (revision of December 17, 2019; Japanese)
4. JFTC | Notification of share acquisitions (Japanese)
5. JFTC | Notification of mergers (Japanese)
6. JFTC | Merger Review Guidebook (official publication page; Japanese)
8. JFTC | FY2025 merger review cases and notification statistics (June 24, 2026; Japanese)
9. JFTC | Points to consider when submitting economic analysis reports and data (Japanese)
10. JFTC | AEON / TSURUHA management integration review (April 30, 2025; Japanese)
11. JFTC | Economic analysis annex to the AEON / TSURUHA review (April 30, 2025; Japanese PDF)
12. JFTC | Toyota / Daimler Truck integration of Hino and Mitsubishi Fuso (February 26, 2026; Japanese)
13. JFTC | Prime Polymer / Sumitomo Chemical business succession review (April 24, 2026; Japanese)
14. JFTC | Published remedy cases using monitoring trustees (Japanese)
Disclaimer
This Legal Update is based on the Antimonopoly Act, JFTC guidelines, procedural materials, published merger cases and other public information available as of October 7, 2026 and is prepared solely for general informational purposes. It does not constitute legal advice or a legal conclusion concerning any specific transaction. Filing requirements, market definition, competitive assessment, remedies and contractual allocation of regulatory risk depend on the transaction structure, the scope of the parties' corporate groups, domestic turnover, voting rights, products and geographies, market structure, customers and competitors, data and intellectual property, and the requirements of other relevant jurisdictions.
The revised Guidelines to Application of the Antimonopoly Act Concerning Review of Business Combination published by the JFTC on July 17, 2026 remain a draft as of October 7, 2026. The public-comment period closed on August 31, 2026, but the JFTC's current Guidelines page continues to identify the version revised on December 17, 2019 as the current Business Combination Guidelines. This Update therefore does not treat the July 2026 draft as a final or effective rule. Any transaction should be analysed against the latest final text and effective date published by the JFTC at the relevant time.
English translations of Japanese statutes, guidelines and JFTC materials are generally provided as reference or tentative translations. The Japanese original should be consulted for authoritative interpretation. This Update does not provide a comprehensive survey of foreign merger-control regimes. Cross-border transactions should be reviewed under the current notification thresholds, procedures, waiting periods and substantive standards of each relevant jurisdiction, with local counsel and other specialists engaged where appropriate.