Japan Moves to Block Buyout With Rare Use of Security Law (2)

The Japanese government has asked Seoul-based private equity firm MBK Partners Ltd. to cancel its planned acquisition of machine tool maker Makino Milling Machine Co., invoking a national security law for only the second time in history.

Makino’s machine tools are widely used in defense applications and the takeover could undermine national security, Finance Minister Satsuki Katayama said in parliament Thursday. Makino’s shares dropped as much as 10% in Tokyo, the most since May.

The government’s move underscores Japan’s growing concerns over security as the US’s commitment to global defense looks increasingly uncertain and tensions with neighboring China ...