Atsumi & Sakai

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M&A (including mergers and acquisitions, and in a broad sense, including spin-offs, restructurings, etc.)

An increasing number of companies adopt M&A as one strategy for achieving specialization or concentration, or expansion of business opportunities. M&A has become active among domestic companies, and in addition to this, transactions involving the acquisition of a Japanese company by a foreign company or the acquisition of a foreign company by a Japanese company have increased dramatically. Further, in most M&A transactions, the acquirer needs to fund the acquisition, at least in part, through borrowing or issuing securities (not only common or preferred shares and bonds, but also new types of securities). Thus, tax planning and compliance with a wide range of regulations in relation to the funding is required. Moreover, the risk of disputes arising out of or in connection with M&A cannot be ignored. Therefore, companies engaging in M&A must pay attention to various complex factors including legal issues.

Atsumi & Sakai offers significant experience in both domestic and cross-border M&A transactions in numerous business sectors, acting for buyers, sellers, finance parties and advisers. We have strengths in advising on the financing transactions and M&A related litigation (including advising on hostile takeover disputes), which contributes to the ability of our M&A team to effectively consummate complicated M&A transactions. (Please see “Finance” and “Dispute Resolution” for more details)

We provide clients with cost effective one-stop, valuable solutions provided by our attorneys whose collective backgrounds and skills are put to good use on any M&A transaction, whilst also being able to consider and advise on ancillary matters such as finance, employment, antitrust, tax and related matters, and taking into account foreign laws as necessary.

We provide advice and assistance tailored to client needs to a wide range of domestic and foreign clients on cross-border M&A matters. Making use not only of Japanese attorneys but also of nearly one dozen non-Japanese partners, of counsel and associates, we are able to handle cross-border transactions flexibly and speedily with countries around the world, including the United States, Europe, China and other Asian countries. (Please see "Cross-border M&A" below for more details)

M&A transactions require careful analysis in order to determine the most appropriate scheme, risk avoidance, tax analysis and compliance with laws and regulations. Further, in most M&A transactions, handling of fundraising and other various matters may be required. We are able to offer comprehensive legal services with regard to these matters.

■Selection of Scheme
We provide advice to our clients on the selection of acquisition and spinoff strategies for the purpose of maximizing profits, such as purchase and sale of shares, tender offers or take over bids, mergers, corporate splits, share exchanges for the purpose of acquisition of all of the outstanding shares of a target, share-for-share transfers creating a new holding company, business transfers, utilization of capital decrease/increase, or, in the worst case, insolvency or liquidation proceedings. We have dealt with various kinds of M&A schemes, and have responded to our clients’ increasing need for acquisitions including takeover bids.

■Risk Assessment and Measures
One of the key factors in M&A transactions is risk assessment, including by way of thorough due diligence. Based on our extensive experience in finance, litigation and international matters, we go beyond the scope of general due diligence and provide advice focusing on risks specific to foreign companies or companies in specific industries. In addition, with our combined team of Japanese and foreign lawyers, we are able to provide due diligence reports and solutions to an international standard and in a form foreign clients require.

■Compliance with Laws and Regulations, M&A of Restricted Industries
In M&A transactions, disclosures pursuant to the Financial Instruments and Exchange Act and stock exchange rules, and compliance with various laws such as labor and employment laws are often required. We are able to provide advice on laws and regulations applicable to each industry, taking advantage of our strengths in finance and litigation, as well as our familiarity with the securities, insurance, foreign exchange, medical, pharmaceutical, entertainment, energy, and other industries, and taking into account our deep experience with international matters.

■Compliance with Antitrust Law
M&A transactions cannot proceed without taking into account the impact of the Antitrust Law. For example, confirmation of absence of any violation of the Antitrust Law through due diligence, and clearance of a transaction under merger control regulations are necessary. We can bring together a team of attorneys with experience before the Japan Fair Trade Commission and can provide advice on all aspects of Antitrust Law related matters.

Furthermore, regarding Antitrust Law/Competition Law related matters in international M&A transactions, please see the following “Cross-border M&A”.

■M&A Finance
Most M&A transactions are funded through borrowing and/or issuance of securities. In receiving financing from financial institutions or funds, particularly in the case of MBOs, LBOs and delisting, it is necessary to examine multiple methods, such as senior and subordinated loans and utilization of class shares. We are specialized in finance and have abundant experience and a proven track-record with M&A finance, whether the client is the lender or acquirer. We also have experience in private equity and venture capital funding, and the issuance of equity as acquisition funding.

Atsumi & Sakai is highly regarded in the finance industry, because of our innovative capabilities in finance, particularly for our work in syndicated loans, securitization, covered bonds and similar structured finance transactions, M&A finance, project finance, PFI, as well as the creation and management of investment funds, both inbound and outbound. We have won many awards in this field. (Please see “Excellence & Innovation” and “Awards” in column of “The Firm”)

■M&A Related Disputes
In M&A deals, it is sometimes necessary to expect that specific shareholders of an acquirer or a target, employees of a target, or other stakeholders, who are clearly dissenting the contemplated M&A deal, would bring lawsuits so as to enjoin a company from engaging the deal, to invalidate the deal, to exercise the shareholders’ appraisal rights, or to seek any other remedies. Also, if a client intends to conduct hostile takeover, it is necessary to expect litigation.

Atsumi & Sakai has significant experience in M&A related litigation, including litigation related to appraisal remedies, hostile takeovers, invalidation of an M&A transaction or invalidation of a shareholder resolution. Some of our attorneys have experiences to deal with epoch-making hostile takeover disputes which are famous in Japan, disputes related to shareholders’ appraisal rights, litigation cases where shareholders seek invalidation of issuance of shares, and so on, and they always share their knowledge and skills in relation to these cases, which is one of our strengths concerning our M&A practice. (Please see “Dispute Resolution” for details)

Cross-border M&A

Based on such factors as overseas market trends, availability of a reliable foreign workforce and foreign exchange fluctuations, we have seen a marked increase in acquisitions of, investment in or business alliances with foreign companies by Japanese companies over the last few years. Furthermore, there are increasing acquisitions of, investment in or business alliances with Japanese companies by foreign entities. We flexibly and speedily handled these M&A transactions in various countries across the world, including the United States, Europe, China and other Asian countries, including many prominent transactions.

Furthermore, regarding Antitrust Law/Competition Law-related matters in international M&A transactions, by leveraging our extensive experience in cross-border matters, we are able to work as a hub for clearance of multi-jurisdictional merger controls, including transactions in many developing nations, provide legal services on the prohibition of “gun jumping” (which is practically understand as actions which parties enter into before the closing so as to facilitate or expedite an acquisition, integration and/or preparation for operations thereafter), and so on. We use our extensive network of trusted global law firms and choose foreign attorneys from among our many contacts who are appropriate for our clients’ needs, and our bilingual attorneys manage and cooperate with these foreign attorneys to provide clients with high quality legal services. (please see “Anti-Trust Law” for more details)

Atsumi & Sakai, while it is a Japanese law firm independent from any foreign law firm, operates as a foreign law joint enterprise, a collaboration between Japanese attorneys and foreign attorneys from various jurisdictions, some of those foreign attorneys being registered foreign attorneys (Gaiben) who have previously served as partners with non-Japanese law firms and, being registered, are able to advise on the laws of their home jurisdictions. This structure, and our attorneys’ experience, provides us with a solid platform to advise on cross-border M&A transactions.

Our Gaiben make use of the differences in language, culture, laws and regulations in providing advice to bridge gaps between the legal systems and cultures of Japan and foreign countries.