Taiwan-based Yageo Corporation has refiled its foreign investment application under Japan's Foreign Exchange and Foreign Trade Act (FEFTA) as of June 2, in a renewed bid to acquire Shibaura Electronics. The move signals Yageo's growing confidence in clearing regulatory scrutiny—a key barrier that has held back its unsolicited tender offer since February.
With this latest submission to Japan's Kanto Local Finance Bureau, Yageo is widely seen as having made substantial progress in negotiations with the Ministry of Economy, Trade and Industry (METI). Industry experts suggest the application's acceptance indicates that regulatory clearance is now within reach, potentially reshaping the ongoing acquisition battle with MinebeaMitsumi.
High-stakes deal draws regulatory attention
According to a report by Nikkei, Yageo initially submitted its application on February 6, one day after launching an unsolicited tender offer (TOB) for Shibaura. However, on February 28, Japan's METI informed the company that the review could not be completed within the statutory review period, urging Yageo to withdraw the filing. The application was formally pulled on March 4, and when Yageo officially launched its bid on May 9—with an upgraded offer of JPY6,200 (US$43.33) per share, outbidding MinebeaMitsumi's JPY5,500—the necessary regulatory filing had yet to be resubmitted.
Shibaura's core tech raises national security flags
Shibaura Electronics, a supplier of components used in military and aerospace systems, has emphasized its role as a "core industry" player, as defined under Japanese law. In a public letter dated March 19, Shibaura formally asserted that its technologies are closely tied to Japan's economic and national security interests.
Under FEFTA, acquisitions by foreign entities in industries including nuclear energy, defense, and telecommunications are subject to a stringent pre-clearance review. METI holds the power to modify transaction arrangements or prohibit them outright if they raise concerns related to national security.
MinebeaMitsumi calls out Yageo's premature move
This regulatory gauntlet has loomed large over Yageo's offer. MinebeaMitsumi CEO Yoshihisa Kainuma has openly criticized Yageo's decision to proceed with its TOB before securing approval, calling it "clearly inappropriate" in interviews with Nikkei and Toyo Keizai. Shibaura Electronics echoed those concerns in a public statement on May 21, questioning the viability of Yageo's acquisition due to the delayed regulatory process.
However, in its revised tender offer document submitted on June 2, Yageo emphasized that it has made "steady progress" in its discussions with METI, prompting the company to refile. Some observers speculate that Yageo may have offered certain non-disclosed assurances to Japanese regulators to ease security concerns.
Bidding war reignites as clock ticks
While METI has declined to comment on the matter, Yageo's resubmission and its formal acceptance suggest a potential turning point in the takeover saga.
Meanwhile, MinebeaMitsumi—positioning itself as a "white knight" in defense of Shibaura—launched its friendly takeover bid on May 2, initially scheduled to close on June 5. The company has since extended its offer to June 19, likely awaiting the outcome of Yageo's regulatory push.
Should Yageo successfully navigate the FEFTA review, market attention will likely shift to whether MinebeaMitsumi will escalate its bid further, intensifying the takeover battle for Shibaura Electronics.
Article edited by Jack Wu
