Vanderbilt Journal of Transnational Law


Mitsuru Misawa

First Page



Merger and acquisition are expected to generate increasing interest in industrial circles throughout Japan. Those who argue in favor of mergers and acquisitions emphasize that these activities will help rejuvenate the economy of Japan through the revitalization of corporate management and the efficient reallocation of resources. Some commentators are strongly in favor of takeover bids and argue that aggressive takeover bids will lead to the revitalization of the individual corporations targeted for acquisition through the arousal of top officials of the targets.

Critics charge, on the other hand, that only raiders, lawyers and speculators find takeover bids profitable. Some complain that raiders purchase equity shares of a corporation simply to run up the share price and make money. They menace the target corporation with a possible acquisition and then attempt to reap large profits by forcing the target to buy back the shares at a higher price. This scenario does nothing for the future of the corporation or the economy as a whole.

Because monetary relaxation has prevailed in Japan for the past five years, some corporations have been engrossed in what some call a "money game" and have managed their surplus funds in money markets in an effort to build up financial assets. There is a consensus in the financial circles of Japan that every effort must be made to prevent this "money game" from making further progress and that what might be called a "casino society" should be prevented from taking root in Japan as it has in the United States. Industrial circles in Japan are ready to welcome merger and acquisition activities in general from a constructive point of view, though they rightly fear the effects of excess speculation.