MBK Acquires Japanese Aluminum Company in 1.2 Trillion Won Deal

Japanese Authorities Approve MBK's Purchase of Artemira, a Core-sector Company with Battery-related Assets, after Screening

Headquarters of MBK Partners.

The Korean private equity fund (PEF) operator MBK Partners is acquiring the Japanese aluminum company Artemira for 130 billion yen (approximately 1.2 trillion won or $923.07 million), including debt.

On May 11, the Nihon Keizai Shimbun (Nikkei) reported that MBK Partners recently received prior screening approval under the authorities’ Foreign Exchange Transactions Act regarding the acquisition of Artemira. MBK Partners recently pushed for the acquisition of the major machine tool company Makino Milling Machine, but withdrew its acquisition proposal after receiving a ‘recommendation for suspension’ based on the Foreign Exchange Act from the Japanese government last month.

Artemira is a company that primarily deals with aluminum cans and industrial aluminum materials. In the aluminum can manufacturing sector, it ranks third in Japan, following Toyo Seikan and others, with annual sales of approximately 200 billion yen.

This company was launched in 2022 by integrating the aluminum businesses of Resonac Holdings and Mitsubishi Materials. At that time, the American fund Apollo Global Management acquired the two companies and led the integration. Under Apollo, the company has been promoting the pioneering of the Asian market and the expansion of its recycling business.

MBK Partners is purchasing shares from Apollo and aiming for an initial public offering (IPO) in a few years. MBK Partners is also reviewing business integration through the acquisition of peer companies, and plans to grow the business through expansion in Vietnam and increasing the added value of industrial products.

The Japanese government designates companies and businesses deemed important for national security as the ‘core sector’. When foreign investors invest in such companies, they must report to the government in advance and undergo screening. The lithium-ion batteries handled by Artemira fall under this category.

The lithium-ion battery-related field was newly added to the core sector in 2023, following the enactment of the Economic Security Promotion Act in 2022. In addition to being used in defense equipment, there was also an intention to reduce technological dependence on China, which is leading in battery development.

In the case of Makino Milling Machine, it is designated as a core sector under the Foreign Exchange Act because it includes dual-use goods (materials that can be utilized for both military and civilian purposes) technology, and the industry views that the authorities took issue with the risk of information leakage. In relation to this, consultations between MBK Partners and the authorities took place over 10 months. In contrast, the acquisition of Artemira was approved in about two months, which Nikkei reported appears to be a judgment that the concerns were relatively small.

Yoon Young-sil