MBK Partners, the private equity firm that drew scrutiny in South Korea for attempting to sell Doosan Machine Tools overseas over fears of leaking national core technologies, has been advised by Japan’s government to halt a planned acquisition for the same reasons. The move is likely to complicate the ongoing control battle for Korea Zinc between MBK and Youngpoong.
According to the Nikkei on the 23rd, Tokyo issued a suspension recommendation under the Foreign Exchange and Foreign Trade Act for MBK’s bid to acquire Japanese machine-tool maker Makino Furai Seisakusho.
Japan treats machine tools as dual-use equipment that can serve both civilian and military ends, designating them a “key industry” under the law. That means foreign buyers must clear a government review before taking ownership stakes.
Japanese officials said Makino’s machine tools are sensitive items with high potential for military application and are widely used across defense platforms, including missiles and submarines. Citing those national-security concerns, the government told MBK to suspend the deal. Companies receiving such recommendations have 10 days to accept them; refusal can lead to a formal suspension order.
Chief Cabinet Secretary Minoru Kihara told reporters the government issued the investment suspension recommendation on the 22nd after a review panel determined there was a credible risk of harm to national security.
Japan’s strict posture on potential technology leaks traces back to the Toshiba Machine COCOM violation about 40 years ago, when a Japanese firm illegally exported high-performance machine tools to the former Soviet Union, contributing to advances in Soviet submarine technology.
Tokyo’s action is part of a broader global trend tightening controls on strategic industries and materials — from defense systems to rare earths, critical minerals and mining — alongside core technologies. Major powers, including the U.S. and China, have moved to limit foreign influence over sensitive technologies and strategic sectors on economic-security grounds. The presence of Chinese and Middle Eastern capital in funds tied to MBK likely weighed on Japan’s assessment.
Concerns that MBK could facilitate the outward transfer of core technologies have surfaced in South Korea before. In 2019, MBK’s effort to sell Doosan Machine Tools to a Chinese buyer was blocked by Seoul amid fears of losing high-precision 5-axis machining center design and manufacturing know-how. That overseas sale collapsed, and MBK later sold the company domestically to DTR Automotive in 2021.
With Japan following South Korea in scrutinizing MBK’s deals, controversy around the Korea Zinc takeover fight is expected to intensify.
Korea Zinc is the country’s sole producer of key minerals that relies on national core and advanced strategic technologies. Analysts warn that the identity of any new owner could materially affect supply-chain stability and critical national industries. Plans for a smelter in Tennessee have further elevated U.S.–Korea supply-chain cooperation, and policymakers in Washington as well as Seoul are watching MBK’s bid for control closely.
