Japanese FTC Streamlines Merger Review Process

The Japanese Fair Trade Commission (the JFTC) has adopted new rules that should streamline Japan's review process for both domestic and global transactions. The new rules will end the JFTC's practice of holding "preconsultations" with companies pursuing mergers or acquisitions that would impact competition in Japan. The JFTC adopted the new rules on June 14, 2011, and they will become effective on July 1, 2011.

Under the prior rules and practice, M&A parties were typically required to consult with the JFTC prior to submitting any official notification of their transaction—in effect, obtaining informal approval of the transaction prior to any filing. However, this preconsultation process was unpredictable and could often take considerable time, with the timing of JFTC approval not known until after the preconsultation was completed. This was particularly problematic for deals done outside of Japan, where filings in Japan had to be coordinated with other global filings.