Japan Halts MBK-Makino Deal as Security Scrutiny Widens
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- Japan halted South Korean firm MBK Partners' acquisition of machine-tool manufacturer Makino Milling Machine on national security grounds, even though machine tools sit far from traditional defense or frontier-tech sectors
- The UK reportedly signaled discomfort with Bharti Enterprises increasing its stake in British Telecom beyond a critical threshold, reflecting unease over control of critical telecommunications infrastructure
- Dutch authorities blocked the takeover of a company linked to DigiD, the Netherlands' digital identity system, treating citizen-authentication infrastructure as a national-security asset
- Chinese authorities intervened in the proposed acquisition of AI startup Manus, viewing it not as a private firm but as part of a broader AI ecosystem shaped by years of state investment and talent development
- The United States has long relied on CFIUS to screen foreign acquisitions, with recent flashpoints including the TikTok controversy, Nippon Steel's bid for US Steel, and China's rare-earth export restrictions
- Even as security reviews tighten, Ford's CATL partnership, Apple's Chinese supply chains, and Morocco's EV-battery sector show firms remain deeply embedded in global production networks backed by Chinese capital and know-how
- The article frames this as 'security-conditioned globalization,' in which strategic markets — semiconductors, telecom, AI, batteries, rare earths — are valued less for their output than for the capabilities and ecosystems they enable
Why it matters: National security reviews now reach into machine tools, telecom, and AI startups — sectors with no obvious defense nexus — making routine cross-border M&A subject to unpredictable government veto. For investors in strategic sectors, the gating question is shifting from whether a deal makes economic sense to whether regulators will permit it at all.
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