TOKYO, April 24 : Japan is seeking to block a takeover attempt by South Korea-based private equity fund MBK Partners of a key industrial machine maker on the grounds of national security, officials said.
The government has determined it is “essential to recommend the suspension” of the bid by MBK Partners to fully acquire Tokyo-based Makino Milling — “the world’s leading manufacturer of machine tools”, finance minister Satsuki Katayama told reporters Thursday.
Given Makino Milling’s products are “widely used by our country’s defence equipment manufacturers”, the minister said, “we have recognised the risk that the investment in question can undermine our country’s security”.
The recommendation was issued Wednesday.
Founded in 1937, Makino Milling provides vital tools for an array of sectors from aerospace to automobile and medicine to semiconductors, according to its website.
It is reportedly only the second time a suspension edict has been issued in accordance with Japan’s foreign exchange and trade laws, which seek to prevent risks to national security.
MBK Partners said in a statement Thursday that it was notified by the government that Makino Milling’s products include “sensitive goods with a particularly high potential for military use”.
“We were extremely surprised” to receive the notice from the government, MBK Partners said, noting the takeover had been slated for approval by late June.
The fund now has until May 1 to decide whether to comply with the suspension advisory.
