On 11 June 2024, the State Administration of Market Regulation (“SAMR”) issued a notice of antitrust review and approved the acquisition by JX Metals Corporation ("JX Metal") of the equity interests in Tatsuta Electric Wire & Cable Co., Ltd.(“Tatsuta”).
This transaction involved the acquisition by JX Metals, a Japanese resource, smelting and electronic materials company, of all of the shares of Tatsuta, a listed Japanese electronic materials company. This was through a tender offer, other than the shares currently held by JX Metals and those held by Tatsuta itself. As a leading company in the global electromagnetic shielding film industry, the transaction received wide attention from the industry and semiconductor-related fields. JunHe acted for JX Metals and Tatsuta and provided full legal services for the antitrust filing in China, which lasted for more than 17 months, and successfully obtained conditional approval from SAMR.
JX Metals was established in Japan in 2002. It operates globally with businesses that include resource development, smelting and refining, manufacturing and selling of electronic materials, as well as the recycling of end-of-life equipment.
Tatsuta was established in Japan in 1945 and is listed on the Tokyo Stock Exchange. It supports infrastructure development by providing cable-related products and is also engaged in electronic materials such as electromagnetic shielding films, functional pastes and bonding wires, sensors and medical products.
The complexities and difficulties of this project include:
（1）The transaction involved the market for components related to Flexible Printed Circuits (‘FPCs’), a key material for semiconductors, including blackened calendered copper foils, FPC stainless steel reinforcement plates, isotropic conductive adhesive films and electromagnetic shielding films. The markets are highly specialized and complex, requiring JunHe’s team to aid the client in multiple rounds of questions, economic analyses and negotiation meetings with SAMR regarding the products and the industry;
（2） This is a technology-intensive industry and the application of products in the downstream products and end products areas is crucial. The counterparty has great market power in the blackened and calendered copper foil and isotropic conductive adhesive film markets so SAMR and the industrial players were concerned with the potential impact of the transaction on market competition. JunHe assisted the client in cooperating with SAMR in a comprehensive, in-depth and detailed review and negotiated and communicated on behalf of the client on issues such as how to reduce the potential impact on market competition;
（3）The transaction was notified through ordinary procedures, with a long review period. Complex factors needed to be reviewed, difficult information was collected, and there was a lot of concern from industrial players, which all required efficient communication with SAMR and timely feedback to the client. JunHe dealt with the uncertainty of the regulatory approvals and assisted the client in controlling the overall timetable of the project.
Leveraging its extensive experience in filings in the semiconductor, high-tech and other related fields, as well as its understanding of solid competition law theories, JunHe organized and analyzed the business relationships between the parties in great detail during the preparation of the filing materials. They conducted detailed and thorough research on the relevant markets and assisted the client to efficiently respond to the regulators and resolve the regulator's questions effectively during the review process. JunHe's rigorous, professional, meticulous, and pragmatic approach to the China antitrust filing process was highly recognized and affirmed by the client.
The lead partner in this project was Janet Hui, and the acting partner was YANG, Chen. Consultant WANG, Dongxin and partner HUANG, Xin provided significant support in key aspects of the project.