• Kyodo News


U.S. President George W. Bush asked Prime Minister Shinzo Abe to explain the meaning of the financial term “triangular merger” during their summit at the Camp David presidential retreat April 27, sources close to the Japanese and U.S. governments said Sunday.

Bush asked the question when Abe called attention to his government’s decision to authorize a request from the U.S. business community and the Office of the U.S. Trade Representative to introduce the takeover technique in Japan, the sources said.

Abe expressed dismay over the question, telling Bush, “This is a measure which the United States strongly requested,” according to the sources.

When Bush asked Abe to explain the term, Abe outlined the takeover technique, the sources said.

He also told Bush he had to overcome numerous objections from domestic critics and was quoted as saying, “I faced lots of criticism that if the triangular merger were authorized, it would open the path for giant U.S. companies to absorb Japanese companies.”

Under the technique, which has been allowed since May 1, a subsidiary in Japan of a foreign firm can take over a Japanese company by swapping new shares issued by the parent for all or a sizable portion of the target’s shares without using any cash to fund the acquisition.

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