Japan's Makino Milling Machine rejects takeover proposal by investor NSSK

Japanese machine tool maker Makino Milling Machine has rejected a takeover proposal from Tokyo-based private equity firm NSSK, citing concerns that government approval would be difficult to obtain due to the involvement of foreign co-investors. This decision follows the Japanese government's intervention in a previous acquisition attempt.

Earlier, the government recommended halting a tender offer from Asia-focused investment fund MBK Partners for Makino, citing economic security concerns. Makino's machine tools are utilized in the manufacturing of defense equipment, raising fears of critical technology and confidential information leaking overseas. The government invoked the Foreign Exchange and Foreign Trade Act, which allows for screening of foreign investments in sensitive industries.

MBK Partners officially abandoned its tender offer on April 30, 2026, after the government's recommendation. This marked a significant instance of government intervention in a deal involving a Japanese critical industry player.

Concurrent with MBK's withdrawal, Makino revealed it had received a non-binding acquisition proposal from NSSK, a Japan-based fund primarily investing in Japanese companies, often small and medium-sized enterprises. However, Makino has stated that its response to the NSSK proposal is undecided, and the company is considering its options, including remaining independent. An acquisition by a domestic fund like NSSK is seen as less likely to raise economic security issues compared to foreign investment.