The Deal: New Restrictions Fail to Curb Japanese Activism

Ron Orol of the The Deal takes a close look at activism in Japan in light of Covid-19 and the amendments implemented last year to the Foreign Exchange and Foreign Trade Act, the new rules intended to protect Japanese corporations vital to national security.

Louis Barbier, partner at SquareWell Partners, commented to Ron Orol that Japan’s new foreign ownership rules would not wholly discourage Western activists from targeting Japanese companies. “What might discourage foreign activists in the long term is the attitude of local shareholders,” Barbier said. “The biggest challenge for foreign activists is to win the support of Japanese institutions. Many don’t have share ownership structures that are inviting of an activist. You may face a retail ‘fan’ base, allegiant corporate shareholdings or a large domestic ownership base hesitant to support the activist’s efforts.”

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