MBK Partners’ plan to acquire Japan-based machine tool maker Makino Milling Machine has run into regulatory resistance, after the Japanese government urged the firm to halt the deal on national security grounds.
Chief Cabinet Secretary Kihara Minoru said Thursday that authorities had identified potential risks linked to the takeover and recommended that MBK suspend the transaction a day earlier.
Machine tools — used to cut and grind high-precision metal components — are classified as a core sector under Japan’s Foreign Exchange and Foreign Trade Act due to their potential military and civilian applications. Foreign investments in the sector are therefore subject to strict government screening.
Following the recommendation, MBK has 10 days to decide whether to comply. If it declines, the government could formally order a suspension.
The move marks the first time Tokyo has invoked the law to intervene in a takeover attempt since it was revised in 2017. Before that, the only comparable case was the 2008 blocked bid for Electric Power Development by London-based The Children's Investment Fund.
MBK had announced in June a 275 billion yen ($1.72 billion) tender offer to acquire Makino, but regulatory reviews in Japan and overseas had already delayed the planned launch.
“We understand the recommendation relates specifically to Makino’s role in the defense and military supply chain,” MBK said in a statement. “We are carefully reviewing the Japanese government’s position.”
MBK, one of North Asia’s largest buyout firms, has been expanding its presence in Japan across sectors including healthcare, senior care and leisure.
silverstar@heraldcorp.com
