First, the Ministry of Finance published a list of all listed companies in Japan, designating them as falling into one of three categories, namely:
- (I) - Companies conducting business activities only in non-designated business sectors (subject to post-investment report only).
- (II) - Companies conducting business activities in designated business sectors other than core sectors.
- (III) - Companies conducting business activities in core sectors.
518 Japanese listed companies are designated as falling into category III. Including Toyota, Sony, Mitsubishi, Hitachi, Tokyo Electric and SoftBank.
Update on Japan’s FDI Regime: 518 Japanese Listed Companies Now Designated as Core Restricted Businesses | Orrick, Herrington & Sutcliffe LLP - JDSupra
Square Enix is Category I. So basically, if Square wanted to sell, it wouldn't be much of an issue for a foreign company to acquire them, if Square wanted to sell to that foreign company that is. If Square can't sell despite being Cat I then that's saying that basically no listed Japanese company can sell which we know isn't true.
Capcom is Cat I, Nexon and Nintendo are Cat II and Saudi Arabia's PIF recently acquired 5% in each with no issue at all. Cat III is where it is hardest, these are areas that Japan considers important to national security, anything over 1% will be thoroughly investigated. I know 5% is nowhere near a controlling stake but I can't find any law that specifically mentions controlling stakes, only this law which states anything over 1% will be investigated.
Once again, nowhere does it state it is impossible, nowhere does it state that Cat III companies are off limits, it's simply saying it will be a lot harder but harder doesn't mean impossible, this law is also clearly targeted at countries such as China, Russia, countries that Japan doesn't have the best relationships with because the main focus on this law is in the interest of national security.
I doubt Japan would have much issue with an American (who they're close allies with) company acquiring a Cat I/Cat II company. Cat III is a different issue, likely a lot harder, likely won't go through without a bunch of concessions and restrictions, not sure it would be worth it. I'd also say that a Japanese company has to want to sell to a foreign company too and this law likely protects against hostile takeovers.
Also, Sharp Corporation is on the list as Cat III but they're owned by Foxconn who are in Taiwan, once again, the law is clearly more targeted at countries that Japan doesn't exactly have the best relationship with, Taiwan is a close Japan ally so they've no issue with Foxconn's ownership.