As the world economy has become more integrated, global M&A has become an important strategic option for multinational corporations. Japan introduced qualified triangular mergers, qualified triangular stock exchanges and qualified triangular stock transfers ("qualified triangular mergers, etc.") in 2007 with anticipation of more investments into Japan by foreign corporations. The most well-known case is the 2008 Nikko Cordial Corporation and Citibank triangular stock transfer, where a US bank acquired a Japanese securities brokerage house without paying cash. After sub-prime issues and with excessive liquidity in China, Chinese companies acquired several Japanese companies using triangular mergers to make them wholly owned subsidiaries of Chinese-controlled companies. Today, with a strong yen exchange rate and weak domestic consumption, Japanese companies are considering cross-border M&A using qualified triangular mergers.
Under the Japanese Company Act, no direct merger is possible between Japanese corporations and non-Japanese corporations. Thus a merger exists where a Japanese operating corporation merges with a Japanese subsidiary of a foreign corporation in exchange for the shares in the foreign parent corporation, instead of shares in a Japanese subsidiary.
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