Nikkei reported on the 23rd that the government issued the recommendation because the products are sensitive goods with a high potential for military diversion and are widely used by domestic defense equipment manufacturers.
Machine tools are considered dual-use items for both military and civilian purposes and are designated a “core industry” under the law. As a result, overseas investors must undergo a government review before acquiring shares.
A company receiving a halt recommendation must decide within 10 days whether to accept it. If it refuses, the Japanese government can issue a stop order. The only previous stop order under the law was in 2008, when a British investment fund sought to increase its stake in electric power company J-Power.
Makino Milling Machine Co., also known as Makino, said its tender offer agreement with MBK remains valid. The company said it is considering steps including measures to raise corporate value and strengthen shareholder returns through higher dividends and share buybacks.
MBK confirmed on the 23rd that it received the government’s recommendation, dated the 22nd, to halt the acquisition plan. MBK told Nikkei it is reviewing its next steps, including whether to accept the recommendation.
MBK Partners previously announced in June last year that it planned to acquire Makino through a tender offer and make it a subsidiary.
* This article has been translated by AI.
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