For only the second time and the first in nearly 20 years, the government has called on a foreign private equity firm to suspend acquiring a Japanese company due to national security concerns.
MBK Partners had expressed an interest in buying machine tool manufacturer Makino Milling Machine Co.
Finance Minister Satsuki Katayama told reporters on April 23 that Makino products were widely used by Japanese defense equipment manufacturers and explained that the recommendation, dated April 22, is based on possible negative effects to national security.
Makino manufactures products that could be converted to military use, and the government likely was concerned about the flow abroad of technology and intelligence through the acquisition.
The government’s recommendation came under the Foreign Exchange and Foreign Trade Control Law.
MBK Partners must decide by May 1 whether it will abide by the recommendation, but on April 23 issued a statement saying it was greatly surprised at receiving the government’s notice.
The last time such a recommendation was issued was in 2008 when the government asked a British fund seeking to increase its stake in Electric Power Development Co. (J-Power) to suspend the move.
After the British fund refused, the government blocked the stock purchase.
If MBK Partners reject the recommendation, a similar order is expected to be issued.
Toward the end of 2024, precision motors giant Nidec Corp. proposed a buyout of Makino without any prior negotiations. That led Makino to reject the move.
MBK Partners claimed in June 2025 that it would be a “white knight” for Makino.
MBK Partners was established in 2005 and concentrates its investments in Japan, China and South Korea.
Established in 1937, Makino’s machine tools are used to manufacture parts used in a wide range of industries from automobiles to aircraft.
In the fiscal year ending in March 2025, it had sales of 234.2 billion yen ($1.5 billion) and about 4,800 employees.
(This article was written by Shiki Iwasawa and Makoto Tsuchiya.)
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