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MBK Partners' acquisition of Japanese manufacturer halted by Tokyo citing nat'l security risk

Published: 23 Apr. 2026, 22:00

The headquarters of MBK Partners in Jongno District, central Seoul, on April 24, 2025. [NEWS1]

TOKYO — The Japanese government has slammed the brakes on Korean firm MBK Partners' acquisition of Japanese machine tool manufacturer Makino Milling Machine, citing "a risk to national security."

The decision, made Wednesday, was based on concerns related to economic security under the Foreign Exchange and Foreign Trade Act, according to Japanese news outlet Nikkei on Thursday. MBK Partners has been pushing to acquire Japan's Makino Milling Machine, a machine tool builder with global sales, whose tools are widely used in defense applications

“The finance ministry and the industry ministry conducted a review under the foreign exchange law and determined that the investment could pose a risk to national security, and issued a recommendation to halt it after consulting an advisory panel,” said Minoru Kihara, the Japanese chief cabinet secretary, on Thursday during a news conference.

It marks the first time since 2008 that Japan has intervened to stop a foreign private equity firm from acquiring a Japanese company, as Prime Minister Sanae Takaichi has pushed for stricter reviews of foreign takeovers on economic security grounds. In 2008, Japan blocked a British investment fund from increasing its stake in a domestic power company.

The Japanese government is also pushing to establish a committee on foreign investment in Japan to review acquisitions by foreign firms, citing concerns such as technology leakage. This is expected to further raise barriers to foreign capital acquiring Japanese companies.

A bill to establish a foreign investment review body was also submitted to the Japanese National Diet in March.

“[The body] aims to enhance Japan’s screening system for foreign direct investment, including establishing a Japanese version of CFIUS, to better respond to investments that may threaten national security,” the chief cabinet secretary said. CFIUS refers to the Committee on Foreign Investment in the United States.

The body is expected to include officials from the finance ministry, the industry ministry and the National Security Secretariat.

The move reflects the strategic importance of the machine tool industry in Japan. Technologies used to process metals are applied not only in electronics but also in automobile and weapons manufacturing.

Japan’s sensitivity over potential leaks of such technology dates back to the 1987 Toshiba Machine scandal, in which the company — a 50.1 percent-owned subsidiary of Toshiba — exported machine tools to Russia via Norway. A U.S. Defense Department investigation later found the tools had been used to manufacture propellers for Soviet nuclear submarines, escalating into a diplomatic dispute between the United States and Japan.

MBK Partners must decide whether to accept the government’s recommendation within 10 days, with a deadline of May 1. If it refuses, the government could issue a formal order to halt the acquisition.

“We are reviewing all options, including measures to enhance corporate value, increase dividends and strengthen shareholder returns through share buybacks,” Makino Milling Machine said.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM HYUN-YE [[email protected]]